Handbook on Corruption, Ethics and Integrity in Public Administration (Elgar Handbooks in Public Administration and Management) 1789900905, 9781789900903

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© Adam Graycar 2020

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Cheltenham Glos GL50 2JA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library Library of Congress Control Number: 2020938632 This book is available electronically in the Social and Political Science subject collection http://dx.doi.org/10.4337/9781789900910

ISBN 978 1 78990 090 3 (cased) ISBN 978 1 78990 091 0 (eBook)

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Contents

List of contributorsviii Acknowledgementsxiii 1

Corruption and public administration Adam Graycar

PART I

1

PUBLIC ADMINISTRATION AND ITS VULNERABILITIES

2

Trends and drivers of public administration in the twenty-first century Zeger van der Wal

10

3

Typologies of anti-corruption frameworks Jean-Patrick Villeneuve, Giulia Mugellini and Marlen Heide

29

4

Virtue and morality in public administration: values-driven leadership in public-sector agencies Michael Macaulay

5

Anti-corruption and its discontents: reforming reform Michael Johnston

6

Dealing with the dark side of policy-making: corruption, malfeasance and the volatility of policy mixes Michael Howlett

67

7

Corruption of public officials by organised crime: understanding the risks, and exploring the solutions Russell G. Smith, Tony Oberman and Georgina Fuller

80

PART II

43 56

CORRUPTION IN SECTORS

8

Redefining sectors: a more focussed approach to tackling corruption Mark Pyman

9

Corruption and administration in healthcare Taryn Vian

115

10

Corruption in the education sector Stephen P. Heyneman

129

11

Corruption and administration in local government Allan Yates

139

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98

vi  Handbook on corruption, ethics and integrity in public administration 12

Curbing corruption in tax administration with enhanced risk mapping of business processes Tuan Minh Le and Beytullah Sarican

13

Corruption and administration in environmental protection Rob White

174

14

Studying police integrity Sanja Kutnjak Ivković

185

15

Prison corruption: an ecological framework Andrew Goldsmith

201

16

Corruption in border administration David Jancsics

215

153

PART III CASE STUDIES FROM AROUND THE WORLD 17

Features of corruption and anti-corruption work in China and India Lina Vyas and Alfred M. Wu

227

18

Corruption in Lithuania: between institutions and perceptions Eglė Butkevičienė, Eglė Vaidelytė and Vaidas Morkevičius

243

19

Public administration and corruption: a comparative case study of the police services in Ghana and Uganda Donna Harris and Mesharch Walto Katusiimeh

20

Corruption, organized crime and the public sector in Mexico Bonnie J. Palifka

21

Public administration and integrity in South Africa: the case of the National Prosecuting Authority Marianne Camerer

22

Corruption, ethics and integrity in public administration in Ukraine Thomas H. Speedy Rice, Alora Jiang and Artem Shaipov

23

Catharsis and reform: an Australian example of building institutional integrity following systemic corruption Ken Smith

24

Corruption and ethics in public administration in Croatia Gordana Marčetić and Sunčana Roksandić Vidlička

345

25

Singapore’s effective anti-corruption recipe: lessons for other countries Jon S.T. Quah

360

26

The Netherlands: an impression of corruption in a less corrupt country Willeke Slingerland and Gjalt de Graaf

377

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255 274

289 304

331

Contents  vii PART IV RESPONSES TO CORRUPTION IN PUBLIC ADMINISTRATION 27

What works: global experiences in public administration Anga R. Timilsina and Charlene Lui

390

28

Regulating conflicts of interest in public office Elizabeth Dávid-Barrett

406

29

Whistleblowers counteracting institutional corruption in public administration 421 Marianna Fotaki

30

Criminological responses to corruption Emile Kolthoff

31

Building ethical organisations: the importance of organisational integrity systems449 Leo Huberts and André van Montfort

32

From anti-corruption to building integrity Nikolas Kirby

434

463

Index483

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Contributors

Eglė Butkevičienė is Professor and Vice-Dean for Research of the Faculty of Social Sciences, Arts and Humanities at Kaunas University of Technology. Her research interests include civil society, civic participation and activism, public governance, public values and social innovations. She is author of over 30 articles or chapters and co-author of three books. Marianne Camerer is Senior Lecturer at the Nelson Mandela School of Public Governance, University of Cape Town, where she teaches ethics, public leadership and governance. She is a co-founder of the international non-governmental organization, Global Integrity. Elizabeth Dávid-Barrett is Professor of Governance and Integrity at the University of Sussex and Director of the Centre for the Study of Corruption. Gjalt de Graaf is Full Professor of Public Administration and Head of the Department of Political Science and Public Administration at the Vrije Universiteit Amsterdam. Marianna Fotaki is Professor of Business Ethics at the University of Warwick Business School. She was Network Fellow (2014–15) at the Center for Ethics, Harvard University. She has published over 70 articles on gender, inequalities and the marketization of public services appearing in leading international journals. Georgina Fuller is a former senior research analyst at the Australian Institute of Criminology and is currently completing a PhD at Griffith University. Andrew Goldsmith is Matthew Flinders Distinguished Professor of Criminology and Director of the Centre for Crime Policy and Research, Flinders University, Adelaide, Australia. His research interests include policing, organized crime, cybercrime and corruption. Adam Graycar (editor) is Professor of Public Policy at the University of Adelaide and at Griffith University, Australia. His previous professorial posts have included the National University of Singapore, the Australian National University and Rutgers, the State University of New Jersey. In 2010 he established the Transnational Research Institute on Corruption at the Australian National University. He acquired extensive policy experience over 22 years in the various senior-level posts he held in government in Australia, both in the federal and the South Australian governments. Donna Harris is Research Fellow at the Centre for the Study of African Economies at the Department of Economics, University of Oxford. Her background is in behavioural economics, development economics and social psychology. Her research focuses on understanding individual and group decisions in different contexts, including corruption, education and proand anti-social behaviour. Marlen Heide is a PhD candidate at the Institute for Public Communication at the Università della Svizzera italiana, Lugano, Switzerland. Her research interest is in the field of transpar-

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Contributors  ix ency studies, security and defence policy and anti-corruption. Besides her academic activities, she works as an international consultant in the field of anti-corruption. Stephen P. Heyneman is Professor Emeritus at Vanderbilt University, Nashville, Tennessee. His current interests include the effect of education on social cohesion, education and religion, and the economic and social cost of education corruption. He serves as Editor-in-Chief of the International Journal of Educational Development. Michael Howlett is Burnaby Mountain Professor and Canada Research Chair (Tier 1) in the Department of Political Science at Simon Fraser University, Vancouver, Canada. He specializes in public policy analysis, political economy and resource and environmental policy. Leo Huberts is Emeritus Professor of Public Administration at the Department of Political Science and Public Administration of the Vrije Universiteit Amsterdam. His main areas of research concern systems of governance and power and the quality, integrity and ethics of governance. He is author or editor of more than 20 books on influence on governmental policy, power theory and measurement, police administration and integrity, public corruption and fraud and on integrity management. David Jancsics is Assistant Professor of Public Administration in the School of Public Affairs at San Diego State University Imperial Valley Campus. His general fields of interest are corruption, informal practices and organizational deviance. His current research agenda focuses on corruption in law enforcement agencies. Alora Jiang is currently completing her juris doctorate at the Washington and Lee University School of Law. She has worked with United States Agency for International Development’s New Justice Project in Kyiv to strengthen educational standards and professional ethics in Ukraine’s legal system. Alora holds a bachelor of arts in international relations from the College of William and Mary. Michael Johnston is the Charles A. Dana Professor Emeritus, Department of Political Science, Colgate University in Hamilton, New York. He has written and edited several books on corruption and reform, most recently (with Alina Mungiu-Pippidi) Transitions to Good Governance (Edward Elgar Publishing, 2017). Mesharch Walto Katusiimeh is Associate Professor, Department of Governance at Kabale University in Uganda. His research interests are in public administration and governance as well as politics of African development. Nikolas Kirby is Leverhulme Early Career Research Fellow in Philosophy and Public Policy and Director of the Building Integrity Programme at the Blavatnik School of Government, University of Oxford. Emile Kolthoff is Professor of Criminology and Criminal Justice at the Open University in the Netherlands and Professor of Organized Crime at Avans University of Applied Sciences in Den Bosch, Netherlands. Sanja Kutnjak Ivković is Professor at the School of Criminal Justice, Michigan State University. She is the chair of the American Society of Criminology International Division and a co-founder and co-chair of the Law and Society Association Collaborative Research Network

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x  Handbook on corruption, ethics and integrity in public administration on Lay Participation. She received the 2017 Mueller Award for Distinguished Contributions to International Criminal Justice, Academy of Criminal Justice Sciences International Section. Her research focuses on comparative and international criminology, criminal justice and law. Charlene Lui is Research and Knowledge Management Analyst for the United Nations Development Programme’s Anti-Corruption for Peaceful and Inclusive Societies global project. Michael Macaulay is Professor of Public Administration at Victoria University of Wellington. His research includes integrity, ethics and anti-corruption and he has worked with a range of agencies around the world, including the United Nations Office on Drugs and Crime and the Council of Europe. Gordana Marčetić is Full Professor at the Chair of Administrative Science, Faculty of Law, University of Zagreb, Croatia. Her specializations are human potentials management and ethics in public administration, civil and public service legislation and reforms of public administration in post-socialist countries. Tuan Minh Le is Lead Economist at the World Bank. He holds a PhD in public policy from Harvard University. Prior to joining the World Bank, he worked as a consultant at the Public Finance Group, Harvard University and was assistant professor of Economics at Suffolk University. Vaidas Morkevičius is Senior Researcher at the Institute of Social Sciences, Arts and Humanities, Kaunas University of Technology, Lithuania. His research interests include social data analysis (applied statistics, qualitative data analysis and qualitative comparative analysis), public and elite attitudes and behaviour, social stratification, political and media discourse. Giulia Mugellini is a post-doctoral researcher at the Università della Svizzera italiana, Lugano, Switzerland. Her research experience is centred on the measurement and analysis of corruption and the evaluation of anti-corruption policies. She is a member of the United Nations Task Force on Corruption Measurement and is one of the authors of the United Nations Manual on Corruption Surveys. Tony Oberman spent over 30 years working in law enforcement and national security, predominantly as an intelligence analyst with the Australian Criminal Intelligence Commission. Bonnie J. Palifka is an international expert in anti-corruption studies, Associate Professor in the Department of Economics at the Tecnologico de Monterrey and Lecturer for Yale Summer Online. She is the founder and organizer of the Academia against Corruption in the Americas conference and has consulted for Transparency International and the United Nations Office on Drugs and Crime. Mark Pyman is a leading practitioner on countering corruption. His knowledge and experience comes from 11 years as Programme Director of Transparency International’s Global Defence and Security Programme, working on military corruption reform in many countries, followed by two years as International Commissioner on the Afghanistan Independent Anti-Corruption Monitoring and Evaluation Committee. He now leads Curbing Corruption, a public resource providing sector-by-sector corruption reforms.

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Contributors  xi Jon S.T. Quah is a retired professor of political science at the National University of Singapore and an anti-corruption consultant based in Singapore. His most recent book is Combating Asian Corruption: Enhancing the Effectiveness of Anti-Corruption Agencies (2017). Thomas H. Speedy Rice, Professor of Practice, Washington and Lee University School of Law, is the 2017 recipient of the distinguished Sheik Tamim Bin Hamas Al Thani International Anti-Corruption Excellence Award for Anti-Corruption Academic Research and Education, in partnership with the Rule of Law and Anti-Corruption Center and the United Nations Office on Drugs and Crime. Beytullah Sarican is a tax policy and administration expert working with the World Bank, where he works on domestic resource mobilization reforms. He holds a master’s degree in economics and public administration from Columbia University, where he has also taught as an assistant. Before joining the World Bank, he had worked at the Turkish Revenue Administration and Audit Board for ten years where he held leadership roles in tax administration workstream, primarily on tax audit, risk analysis, automation of tax administration functions and international tax issues. Artem Shaipov serves as Legal Specialist and Task Leader on Legal Education Reform for the United States Agency for International Development New Justice Program in Ukraine implemented by Chemonics. Artem holds a master of laws from the University of Cambridge and he is a member of the German Marshall Fund of the United States’ Policy Designers Network. Willeke Slingerland is Professor of Applied Research in Resilient Democracy at Saxion University of Applied Sciences in the Netherlands. She is the Dutch national correspondent on corruption issues for the European Commission. Her research expertise includes corruption, fraud, money laundering and integrity and good governance. Ken Smith is Dean and Chief Executive Officer of the Australia and New Zealand School of Government. He previously headed a number of government departments in Queensland, including the Department of the Premier and Cabinet. He is currently Enterprise Professor at the University of Melbourne, and has held adjunct positions at a number of other universities. Russell G. Smith is Principal Criminologist at the Australian Institute of Criminology and a Professor in the College of Business, Government and Law at Flinders University. Anga R. Timilsina is currently the United Nations Development Programme’s Global Advisor on Anti-Corruption. He also leads its Anti-Corruption for Peaceful and Inclusive Societies global project. He has provided policy and programme support on governance and anti-corruption to more than 40 countries. Anga has edited, authored and co-authored more than two dozen publications on a range of development topics including anti-corruption, governance reforms, post-conflict reconstruction, gender, and climate change. Eglė Vaidelytė is Associate Professor in Public Administration and Sociology as well as Director of the political science, sociology and public governance study programmes at the Faculty of Social Sciences, Arts and Humanities, Kaunas University of Technology. Her research interests include public governance, ethics and values in the public sector, philan-

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xii  Handbook on corruption, ethics and integrity in public administration thropy and civil society. She is the author of over 20 articles or chapters and editor as well as co-author of three books. Zeger van der Wal is Associate Professor at the National University of Singapore and Professor by Special Appointment at Leiden University. He works on public leadership, twenty-first-century skills and ethics and integrity management. He has (co-)authored over 100 publications and regularly consults for governments and keynotes at major conferences. André van Montfort is Associate Professor in Public Administration at the Vrije Universiteit Amsterdam in the Netherlands. His research activities focus on the theme ‘quality of governance’, with special attention to the functioning of local integrity systems and legal protection procedures. He serves as a substitute judge at a district court and as Chairman of the local appeals committee of a large Dutch municipality. Taryn Vian is Professor at the University of San Francisco and an expert in health systems and anti-corruption in the health sector. She is co-editor of Anticorruption in the Health Sector: Strategies for Transparency and Accountability (2010) and has published extensively on corruption issues. Sunčana Roksandić Vidlička is Assistant Professor at the Chair of Criminal Law, Faculty of Law, University of Zagreb, Croatia. Her specializations include political white-collar crimes, international economic criminal law, corruption, peace and security. Jean-Patrick Villeneuve is Associate Professor and Director of the Institute for Public Communication at the Università della Svizzera italiana, Lugano, Switzerland. He also holds academic positions at the École nationale d’administration publique in Canada and at the University of International Business and Economics in China. His research expertise is centred on issues of accountability, transparency and anti-corruption. He works with various public institutions at local, national and international levels. He is a member of the Open Government Partnership’s Independent Expert Panel. Lina Vyas is Assistant Professor in the Department of Asian and Policy Studies at the Education University of Hong Kong. Her research interests include public human resource management, public-sector reform, corruption and governance. Rob White is Distinguished Professor of Criminology in the School of Social Sciences at the University of Tasmania, Australia. He has published extensively in the areas of criminology, youth studies and eco-justice, with his recent book Climate Change Criminology framing global warming as a crime of ecocide. Alfred M. Wu is Associate Professor in the Lee Kuan Yew School of Public Policy at National University of Singapore. His research interests include public-sector reform, central– local fiscal relations, corruption and governance and social protection in Asia. Allan Yates currently works within the Insurance Australia Group, providing specialist advice on the risks associated with fraud and corruption. His previous experience in the prevention, education and investigation of fraud and corruption spans different sectors within Australia and the United Kingdom, including health, higher education and local government. Allan’s PhD explores perceptions and experiences of corruption within the New South Wales local government.

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Acknowledgements

Adam Graycar would like to thank Jacqui McCann for her great assistance with making the logistics for the book work, and for her intellectual contribution in reading and commenting on many of the chapters. Dr Samuel Ankamah from Griffith University assisted also with the manuscript and Dr Adam Masters of the Australian National University provided helpful comments as the project developed. The University of Adelaide and Griffith University provided some support in the preparation of the manuscript.

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1. Corruption and public administration Adam Graycar

COSTS AND HARMS OF CORRUPTION Governments exist to deliver value to their communities and to preside over, as Easton (1965) put it, the “authoritative allocation of values”. Delivering value is highly contested politically, but whatever ideologies prevail or the courses of action taken, they are underpinned by public administration. Governments may choose to deliver goods and services, or they may choose to regulate their delivery, or may leave them completely alone. They can choose to regulate lightly or heavily, they may regulate the economy, health care, transport, communications, teacher performance, water quality and on and on. If these things are delivered or regulated according to ethical principles and underpinned by good public administration, then the community receives value. If they are tainted by corruption then the community is cheated. All societies organize themselves to reflect legal, economic, political and social values. Formal mechanisms of administration have been studied throughout history and there is a continual search to find more responsive, more efficient and more effective forms of delivery. Whether the stakes are high or low, there are opportunities for those in administration to pursue their own interests at the expense of those of the community. Research in public policy explores better ways of developing and implementing desirable goals and objectives. This research has no currency when corruption is present. Where there is a lack of integrity or corruption then public administration is deficient and public value suffers. Globally corruption costs governments and businesses trillions of dollars per year, it adds substantially to costs of goods and services, but most importantly it damages policy objectives and diminishes trust. The catalogue of harms caused by corruption is long. Among other things, corruption hampers economic performance and growth; discourages investment; distorts natural resource development; damages the environment; reduces tax revenue; diminishes quality of life; retards human development; distorts services; weakens judicial integrity and the rule of law; and, of relevance in this book, leads to inefficient public administration. Defining corruption is not always a fruitful exercise, as there are many nuances and interpretations. In essence it involves trading in entrusted authority, and using one’s position to distort outcomes in return for personal gain. It might involve doing wrong things in a public office such as failing to do something that one should do, or doing something permissible, but purposely doing it in an improper manner. Clear definitions are necessary for legal matters relating to corruption and for prosecutions, but not absolutely necessary for improvements in public administration. Definitions and discussion about definitions of corruption abound in the literature (see, for example, de Speville 2010, Dobel 2002, Graycar and Prenzler 2013, Heidenheimer and Johnston 2008, Heywood 2017, Johnston 2005, Klitgaard 1988, Kurer 2015, Mulgan 2012, Philp 2015, Rose-Ackerman and Palifka 2016, Rotberg 2018, Treisman 2000). Various estimates by the United Nations (2018), the World Economic Forum (2015) and the World Bank (2018), KPMG (2017) and PWC (2019) are that each year corruption costs about 1 Adam Graycar - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:12PM via The University of British Columbia Library

2  Handbook on corruption, ethics and integrity in public administration 5 per cent of global gross domestic product (GDP) (about $3 trillion), and adds about 10 per cent to the cost of doing business. Also about $1 trillion per year is paid in bribes while the kleptocrats of this world skim or loot about $40 billion per year. In an informative report the International Monetary Fund (IMF) estimates that reducing corruption in one area alone, tax administration, could boost total tax revenues by $1 trillion more than they are today, or 1¼ per cent of global GDP (IMF 2019, p.43). Furthermore, the gains would be greater because lower corruption would raise economic growth, further boosting revenues. The IMF conducted a cross-country comparison which confirms that government revenues are significantly lower in countries perceived to be more corrupt. If these countries improved their tax administration and reduced bureaucratic corruption by the same amount as middle-ranked countries did between 1996 and 2017 the extra $1 trillion would be there. Chapter 12 by Le and Sarican develops a roadmap for designing effective anti-corruption programmes based on risk mapping of key tax administration functions. In taxation, anti-corruption measures would ultimately boil down to reducing both the motives and opportunities for rent seeking. A graphic in this IMF report headed “Corruption Leakages in the Public Sector” (p.42, figure 2.3) is drawn to resemble a network of plumbing pipes, which show bureaucratically devised leakages in the system including the following: ●● In state-owned companies (and obviously in general services) corrupt bureaucrats negotiate poor contracts. ●● When a tax regime is being developed corrupt legislators give away tax exemptions and investment incentives in exchange for bribes. ●● When that tax is being collected, corrupt tax administrators collude with taxpayers to let them evade taxes. ●● In borrowing and grant arrangements, funds are diverted by corrupt bureaucrats. ●● In financial management there can be theft from unmonitored accounts and embezzlement which is enabled by weak financial controls. ●● When budget choices need to be made about spending, decisions on investment projects and subsidies are based on bribes and patronage. ●● When extrabudgetary funds and public enterprises are governed, there can be a lack of controls, misappropriation of budget and conflicts of interest. ●● When procurement decisions are made, there can be bid rigging, overpricing, low-quality products and services, padding of invoices, non-delivery of goods, etc. ●● When administering wages and pensions, ghost workers and ghost pensioners often appear. Of course this is not standard in every bureaucracy, but it is real enough in many of the systems in which the IMF deals. In rich countries the risks are there but the integrity base and the management processes and controls make examples like these the exception rather than the rule. It is important to determine whether corruption is the norm, or whether it is usually an exception. In some systems corruption is the pervasive custom. Citizens are shaken down regularly by civil servants, some terribly poorly paid and hoping to make ends meet, and some adequately paid, but opportunistic and greedy. Wheelers and dealers issue contracts to friends and cronies, and support infrastructure projects that have little public value. Kleptocratic leaders loot the state and use the treasury as their own piggy bank, often converting funds into substantial assets in offshore countries (Chaikin and Sharman 2009, Sharman 2011).

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Corruption and public administration  3 Do these events happen all the time? Do the citizens just expect this as part of their everyday routines? Or are these exceptional events? The first point of diagnosis in studying corruption is to determine whether corrupt events are transgressions, or whether they are systemic. If transgressions, the policy and management task is to stop them becoming systemic. If systemic, the developmental process is to turn against corruption as the norm. This process is analysed carefully by Alina Mungiu-Pippidi who argues that the challenge is to move from a situation of bureaucratic particularism to ethical universalism (Mungiu-Pippidi 2015). There is a long debate about whether corruption is caused by poor systems and exploitable loopholes, or whether it is something that is more about the nature of political systems, and whether things like democratic processes, transparent transactions and genuine representation human rights are the norms (Mungiu-Pippidi 2020). If the task is to move from a system characterized by particularism, solutions lie in the political arena and involve deep democratization (Johnston 2014) and the development of virtuous circles in governance (Mungiu-Pippidi and Johnston 2017). On the other hand if it is the control of transgressions then strengthening the principal/agent relationship is one way forward. The principal, the politician or minister delegates to the agent the task of implementing the principal’s policies. The agent is a public servant who in Weberian terms occupies an office, receives a salary and has certain authority and delegations and delivers as required. If an agent makes discretionary decisions to benefit a client, and if the exchange is hidden, and if the agent receives a payment, it is a corrupt exchange. This assumes that the principal is not corrupt, but the agent may be. There are of course situations in which the principal is corrupt, and situations in which both the principal and agent are corrupt and work in tandem. Sometimes the corrupt event is limited and confined. Sometimes it becomes corrosive as others are drawn into the web of corruption. There is a strong debate about whether developing better processes really has an effect. Persson et al. (2019) argue that this has no impact on corruption control and that collective action is the only way forward. However, where corruption is a transgression, where it is outside the everyday expectations of citizens then building cultures of integrity, making improvements in bureaucratic processes and compliance and enforcement do have a positive impact on corruption.

NOT ALL CORRUPTION IS THE SAME Dahlström and Lapuente’s excellent book on good governance (2017) opens by expressing the view that governments of high quality act impartially, are non-corrupt and use resources efficiently. They test empirically the components that make this work, and observe that even where many favourable structures are in place, corruption, wasteful spending, rent seeking and ineffectiveness still occur. Their argument is that if the interests, career paths and incentives of politicians and bureaucrats are separate and not interdependent then appropriate checks and balances are more likely. Not all corruption is the same, and some places are more corrupt than others, whether they be nation states, government departments or police stations. There are many types of corrupt behaviour, and they operate differently in various sectors and places. Corruption also comes in many forms. It is much more than just bribery, which is what comes to mind in most discussions.

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4  Handbook on corruption, ethics and integrity in public administration Corruption includes many types of behaviour, such as bribery, extortion, cronyism, misuse of information and abuse of discretion. These behaviours can take place by way of different activities such as appointing personnel, procuring services, controlling and regulating activities such as issuing permits, licences and concessions, constructing things, etc. Many of these occur concurrently in different sectors such as health, energy, tax administration, justice, etc., and in different places, such as regions, localities or specific workplaces. These concepts, described elsewhere as TASP (types, activities, sectors, places), provide a framework for the analysis of corrupt events in the public sector (Graycar 2015, Graycar and Sidebottom 2012). Table 1.1 illustrates the framework. Table 1.1

Corruption in different dispositions (TASP)

Type

Activities

Sectors

Places

Bribery

Issuing licences or permits or

Agriculture

Workplaces

Extortion

concessions

Construction

Localities

Embezzlement

Hiring people

Customs and immigration

Regions

Sexploitation

Managing money

Disaster relief

Countries

Self-dealing

Administering justice

Education

etc.

Abuse of discretion

Buying things (procurement)

Energy

Misuse of information

Delivering programmes or services

Environment and water

Creating or exploiting conflict Making things (construction/ of interest

Patronage/nepotism/cronyism/ Rebuilding things (after a disaster) clientelism etc.

etc.

Fisheries Forestry

manufacturing)

Health Tax administration etc.

This book is very loosely organized around types, activities, sectors and places with the first three parts covering these items, and the fourth exploring responses to corruption in public administration. There are major differences between corruption in rich countries and corruption in poor countries. In poorer countries bribery and extortion feature prominently in studying corruption types. In richer countries it is much more likely to be hiring friends or family, conflicts of interest, misuse of information or misuse of discretion. This is the face of (principal/agent) corruption in rich countries (Andersson 2008, Graycar 2016, Graycar and Monaghan 2015). In addition to using TASP as an analytical tool it is useful to distinguish whether the corrupt activity is a consensual activity or an activity in which one party feels extorted. Do two parties come together to exploit the system to the mutual advantage of both, or is one party shaken down by the other (“you won’t get the permit to which you are entitled unless you pay me extra”)? We can distinguish corruption with theft, where the state loses money – fees, charges, tax revenue, overpriced goods and services, etc. – from corruption without theft where manipulation of process, fixing a contract for a crony, giving a job to a friend, demanding sexual services for a decision are the characteristics. In these cases the state does not lose money. It would have to give a contract anyway, or employ a person for the position. There are risks posed by the outsourcing of government functions. In the late nineteenth century many private functions were taken over by government such as fire fighting, police, electricity, hospitals and some forms of transport to mention a few. Late in the twentieth century the prevailing view was that government should steer and not row (Osborne and

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Corruption and public administration  5 Gaebler 1995) and this became the basis for the New Public Management. In analysing these trends Adam Masters (2019) argued that corruption was also outsourced, and with a series of case studies demonstrated three types of outsourced corruption flowing from the outsourcing of functions. These have ramifications for public administration. First, a power of the state is outsourced and then abused by a private party entrusted with that power. Examples of this occur when major procurement items in say defence or information technology are outsourced to consultants to act on behalf of governments. It is really a case of corruption in contract management, a major part of public administration. A second model outlined by Masters is outsourcing as a form of patronage in which powerful groups and oligarchs become rich through kickbacks and special deals for their inner circles. The civil servants are often out of the loop as big decisions about allocation of power and resources are made outside government through patronage networks. A third model involves agents deliberately engaged by governments to act in a corrupt manner on the state’s behalf. One finds this in many conflict situations. In Afghanistan for example the United States government paid warlords to keep supply chains open and they did so by massive extortion of protection money, bribery and unaccountability, all with the knowledge of the United States government (Kilcullen 2011). Cases like this are really state support for outsourced corruption. While corruption is studied extensively, other forms of poor behaviour contribute to less than optimum functioning of government. Misconduct and maladministration make up a much larger proportion of complaints to anti-corruption agencies than do allegations of corruption (Kempf and Graycar 2018). Misconduct occurs when behavioural codes are violated, and these could include bullying and harassment in the workplace, drug or alcohol abuse in the workplace, victimization, poor attitude and even criminal activity such as assault in the workplace. Misconduct is not necessarily less serious than corruption – its effects can be devastating, and responses can come from both internal leadership and external referees. Maladministration, on the other hand can result in poor programme outcomes, waste of resources and abuse of office. Here public officials might not follow procedures, make inconsistent decisions regardless of evidence and spend public money without due diligence. There is not necessarily a personal kickback to an official but to observers it looks corrupt, unethical or just not right. When a building or a crane collapses because it has not been inspected properly, one has to determine whether the official who signed off was lazy, ignorant, or devious and corrupt. For a crime to occur, routine activity theory tells us that three elements are necessary: a motivated offender, a target and the absence of a capable guardian (Clarke and Felson 2010). This principle applies equally to public corruption. If any one of these is missing there is no corrupt event. Governance systems in modern states provide target-rich environments for motivated offenders. The guardianship can often be complex, convoluted and incredibly rule bound. However, in Australia (and by implication in other rich countries) experience has shown that lecturing to public officials as though they are potentially corrupt or are criminally inclined is both counter-productive and insulting. My colleague Adam Masters and I explored ways of understanding malfeasance in public administration, especially in low-corruption environments (Graycar and Masters 2018). In societies intolerant of corruption it is harder for corruption to occur at the point of public service delivery. Integrity institutions and systems exist to ensure that organizations perform as expected, and that reporting mechanisms enable citizens to act as frontline watchdogs.

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6  Handbook on corruption, ethics and integrity in public administration Most aspects of public administration fall within the following five categories or functions: ●● ●● ●● ●● ●●

delivery of services to the public; financial management; resource and service procurement; human resource management, hiring people and managing them; and issuing of licences, concessions and permits.

Working from actual case studies, for each of these we teased out how to increase the effort required for officials to behave badly; increase the risk of being caught and reduce the rewards of their behaviour; build and value integrity; and raise awareness (Graycar and Masters 2018). Putting these into a matrix and using them in a workshop situation allows participants to focus on their own specific agency situation, as well as developing general strategic approaches. Potential actions are many and varied and can involve, among other things, be transparent in transactions, reduce anonymity, audit finances, audit property, monitor contracts, keep good-quality records, embed and project integrity, use high-standard human resource management practices, assist compliance, neutralize peer pressure and have clear policies. In an Australian example there was a severe integrity breakdown in a large government department, the Department of Education and Training in the state of Victoria (IBAC 2017). A small group of senior officials corruptly issued contracts, exhibited significant conflict of interest and fostered a culture of harassment and bullying of potential whistle-blowers. There was a culture of fear and intimidation as they captured the vision for the department and overall exhibited many characteristics of misconduct, maladministration and corruption. The department suffered significant reputational loss, as well as financial loss and loss of trust of many stakeholders. The department responded by issuing a blueprint for renewal which involved three lines of defence (Victoria Department of Education and Training 2017): ●● First Line: A culture of integrity underpins everything we do. ●● Second Line: Smart systems and controls to oversee and guide our actions. ●● Third Line: Independent and robust assurance (audit). Over 48 pages the report outlines, step by step, how these aspirational statements are to be implemented and inculcated into the department’s culture. The strategy starts with employee awareness and a values strategy. Values such as responsiveness, integrity, impartiality, accountability, respect, human rights and leadership were to be rolled out one per month, by way of posters, quick reference sheets, conversation guides, an e-learning module and the distribution of values packs. The report goes through codes, frameworks and systems, and implementation of aspirations such as standard values, investing in people, culture of respect and integrity and setting tone at the top. This is all aimed at changing culture and putting protective processes in place. This example highlights the complexity of the situation and the complexity of the solutions. This book outlines problems and solutions. It diagnoses situations, provides detailed analysis and proposes ways forward. The authors come from many countries and their experience transcends many domains. The first point however is always an ideological point. Is corruption a reflection of bad administration, or is corruption something deeply embedded in political culture? A leading scholar, Alina Mungiu-Pippidi, notes (2020) that public administration is

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Corruption and public administration  7 endogenous to, and not a cause of the quality of government. The ideal in corruption prevention is to have the state separate from private interests and to be able to treat citizens equally and impersonally. It is debateable whether this comes about through better management or large-scale political processes. Mungiu-Pippidi (2020) points out that World Bank researchers argue that solving governance with administrative or civil service reform is to confuse the solution with the problem. She shows that over time corruption has reduced with gains in human rights, transparency and equality, rule of law, elimination of legal privileges, free universal elections, meritocratic recruitment of civil servants and abolition of “offices for sale”. These and other instruments of deep democratization took many decades of reform and are not quick fixes to deeply entrenched problems. However, knowing one’s starting point is important. In a highly corrupt society many administrative changes seem like band aid solutions. In considerably less corrupt societies they can have a major impact in improving the quality of government. Anyone with this handbook before them can choose to focus on chapters that seem relevant to them at this moment. There are lessons to be learned from poor countries and rich countries. The authors who have generously contributed to this book have looked both broadly and narrowly, and lessons about the causes of corruption and means to prevent it are here to be shared.

REFERENCES Andersson, Staffan. 2008. “Studying the risk of corruption in the least corrupt countries”. Public Integrity 10 (3):193–214. Chaikin, David, and Jason Sharman. 2009. Corruption and money laundering: a symbiotic relationship. New York: Springer. Clarke, Ronald V., and Marcus Felson. 2010. “The origins of the routine activity approach and situational crime prevention”. In The origins of American criminology, edited by F. Cullen, C. Jonson, A. Myer and F. Adler. New Brunswick: Transaction Press. Dahlström, Carl, and Victor Lapuente. 2017. Organizing Leviathan: politicians, bureaucrats, and the making of good government. Cambridge: Cambridge University Press. de Speville, Bertrand. 2010. Overcoming corruption: the essentials. Richmond: de Speville and Associates. Dobel, J. Patrick. 2002. Public integrity. Baltimore, MD: Johns Hopkins University Press. Easton, David. 1965. A framework for political analysis. Englewood Cliffs, NJ: Prentice Hall. Graycar, Adam. 2015. “Corruption: classification and analysis”. Policy and Society 34 (2):87–96. Graycar, Adam. 2016. “Corruption and public value”. Public Integrity 18 (4):339–41. Graycar, Adam, and Adam B. Masters. 2018. “Preventing malfeasance in low corruption environments: twenty public administration responses”. Journal of Financial Crime 25 (1):170–86. Graycar, Adam, and Olivia Monaghan. 2015. “Rich country corruption”. International Journal of Public Administration 38:586–95. Graycar, Adam, and Tim Prenzler. 2013. Understanding and preventing corruption. Basingstoke: Palgrave Macmillan. Graycar, Adam, and Aiden Sidebottom. 2012. “Corruption and control: a corruption reduction approach”. Journal of Financial Crime 19 (4):384–99. Heidenheimer, Arnold J., and Michael Johnston, eds. 2008. Political corruption: concepts and contexts. Piscataway, NJ: Transaction Publications. Heywood, Paul. 2017. “Rethinking corruption: hocus-pocus, locus and focus”. Slavonic and East European Review 95 (1):21–48. IBAC. 2017. Operation Dunham. www​.ibac​.vic​.gov​.au/​general/​search​-results​?indexCatalogue​=​search​&​ searchQuery​=​dunham​&​wordsMode​=​0 (accessed 19 March 2020).

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8  Handbook on corruption, ethics and integrity in public administration International Monetary Fund (IMF). 2019. Fiscal monitor: curbing corruption. www​ .imf​ .org/​ en/​ Publications/​FM/​Issues/​2019/​03/​18/​fiscal​-monitor​-april​-2019 (accessed 19 March 2020). Johnston, Michael. 2005. Syndromes of corruption: wealth, power, and democracy. New York: Cambridge University Press. Johnston, Michael. 2014. Corruption, contention and reform: the power of deep democratization. Cambridge: Cambridge University Press. Kempf, Robin J., and Adam Graycar. 2018. “Dimensions of authority in oversight agencies: American and Australian comparisons”. International Journal of Public Administration 41 (14):1145–56. Kilcullen, David. 2011. The accidental guerrilla: fighting small wars in the midst of a big one. Oxford: Oxford University Press. Klitgaard, Robert E. 1988. Controlling corruption. Berkeley: University of California Press. KPMG. 2017. Anti-bribery and corruption. https://​assets​.kpmg/​content/​dam/​kpmg/​xx/​pdf/​2017/​10/​anti​ -bribery​.pdf (accessed 19 March 2020). Kurer, O. 2015. “Definitions of corruption”. In Routledge handbook of political corruption, edited by P. Heywood. Abingdon: Routledge, 30–41. Masters, Adam B. 2019. “Outsourcing corruption”. In Global corruption and ethics management: translating theory into action, edited by Carole Jurkiewicz. Lanham, MD: Rowman and Littlefield, 34–41. Mulgan, Richard. 2012. “Aristotle on legality and corruption”. In Corruption: expanding the focus, edited by B. Hindess, M. Barcham and P. Larmour. Canberra: ANU E-press, 25–36. Mungiu-Pippidi, Alina. 2015. The quest for good governance. Cambridge: Cambridge University Press. Mungiu-Pippidi, Alina. 2020. “The quality of government and public administration”. In Oxford Research Encyclopedia of Public Administration. Oxford: Oxford University Press. Mungiu-Pippidi, Alina, and Michael Johnston. 2017. Transitions to good governance: creating virtuous circles of anti-corruption. Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing. Osborne, D., and Ted Gaebler. 1995. “Reinventing government”. Journal of Leisure Research 27 (3):302–4. Persson, Anna, Bo Rothstein and Jan Teorell. 2019. “Getting the basic nature of systemic corruption right: a reply to Marquette and Peiffer”. Governance 32 (4): 799–810. Philp, M. 2015. “The definition of political corruption”. In Routledge Handbook of Political Corruption, edited by P. Heywood. Abingdon: Routledge, 17–29. PWC. 2019. “The cost of corruption – too big to ignore”. www​.pwc​.com/​gx/​en/​issues/​economy/​global​ -economy​-watch/​cost​-of​-corruption​.html (accessed 19 March 2020). Rose-Ackerman, Susan, and Bonnie J. Palifka. 2016. Corruption and government: causes, consequences, and reform. Cambridge: Cambridge University Press. Rotberg, Robert I. 2018. “Accomplishing anticorruption: propositions and methods”. Daedalus 147 (3):5–18. Sharman, Jason. 2011. The money laundry: regulating criminal finance in the global economy. New York: Cornell University Press. Treisman, Daniel. 2000. “The causes of corruption: a cross-national study”. Journal of Public Economics 76 (3):399–457. United Nations Secretary General. 2018. Global cost of corruption. https://​www​.un​.org/​press/​en/​2018/​ sc13493​.doc​.htm (accessed 2 February 2019). Victoria Department of Education and Training. 2017. “Working with integrity”. www​.ibac​.vic​.gov​.au/​ docs/​default​-source/​Responses/​det​-second​-report​-to​-ibac​-september​-2017​.pdf​?sfvrsn​=​8 (accessed 19 March 2020). World Bank. 2018. “Combatting corruption”. www​.worldbank​.org/​en/​topic/​governance/​brief/​anti​ -corruption (accessed 19 March 2020). World Economic Forum. 2015. “Corruption, the hidden tax”. www​ .weforum​ .org/​ agenda/​ 2015/​ 11/​ corruption​-the​-hidden​-tax​-on​-global​-growth/​ (accessed 19 March 2020).

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2. Trends and drivers of public administration in the twenty-first century Zeger van der Wal

INTRODUCTION The operating environment of public servants and public organizations is dynamic and changes constantly. Unpredictable and ambiguous international events and power shifts, assertive stakeholders challenging policy domestically, and rapid, volatile demographic, economic, and technological changes affect this operating environment. A popular saying these days is that public servants increasingly operate in a “VUCA world” (Johansen 2007), characterized by volatility, uncertainty, complexity, and ambiguity. The VUCA operating environment that challenges traditional conceptions of public administration is the result of various, interrelated megatrends; reported extensively in a variety of recent articles, books, and reports from governments and consulting firms (Dickinson and Sullivan 2014; Dickinson et al. 2019; Dobbs et al. 2015; Gratton 2011; KPMG 2013; Needham and Mangan 2016; ‘t Hart 2014; Van der Wal 2017a; Vielmetter and Sell 2014). The trends identified by various governments, scholars, and consulting firms, such as political and economic power shifts from the West to the East, the rise of the assertive stakeholder, fiscal austerity and doing more with less, climate change and resource constraints, and demographic challenges, show remarkable similarity and overlap (Van der Wal 2017a: 36). Moreover, KPMG (2013: 8) asserts: Global megatrends are highly interrelated. While the individual trends won’t play out to the same degree in each country, the resulting consequences are inevitably interconnected and reinforce each other in terms of impact. This relationship is evident when considering, for example, the nexus of issues around changing demographics, resource stress and climate change [the same goes for rise of the individual, enabling technology, and economic power shifts and interconnectedness].

This chapter focuses on eight global megatrends impacting public sectors around the world, albeit differently according to economic and political context and stage of development, providing facts, figures, and perspectives from a variety of sources (the typology of trends is based on Van der Wal 2017a: 31–48).

GLOBAL TRENDS FOR PUBLIC ADMINISTRATION “All Is Networked”: Enabling Technology, Social Media, and Big Data Obviously, a key overarching factor here is technological advancement. Rapid technological evolutions of the past few decades have led to a world in which many gadgets that appeared in science fiction movies in the 1980s and 1990s are now reality; in fact, they have even been 10 Zeger van der Wal - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:16PM via The University of British Columbia Library

Trends and drivers of public administration  11 surpassed. Indeed, it seems hard to imagine nowadays that smartphones didn’t even exist less than a decade ago; the “global app” economy was estimated to be worth 151 billion USD in 2017. Smartphones with mobile internet are transforming the way we work, live, and communicate on a daily basis, and the 1,000-fold increase in speed of the mobile internet when 5G replaces 4G around 2020 will accelerate this beyond imagination. Increasingly, we are living in a “network society” (Castells and Cardoso 2006) that leads to global economic interconnectedness, the fourth megatrend in this chapter. By its very nature, technology accelerates the changes it sets in motion and exponentially increases available data and information. In 1965, future Intel founder Gordon E. Moore famously predicted that the capacity of microchips would double every two years. This observation, dubbed “Moore’s Law”, was adjusted a decade later by Intel executive David House to 18 months. It appears that the rate of growth will begin to slow (as chip capacity is not infinite). However, one profound consequence of increasing computer processing and storage capacity is an increase in the production of data, or the “creation of knowledge”. It is estimated by companies like IBM that around 90 percent of the digital data in the world today was created in just the past two years (Van der Wal 2017a: 37). Indeed, much has been written about the implications of “big data” for business, government, and society (Mayer-Schönberger and Cukier 2013). Less explored are the potential effects on public sectors, in areas such as the information-processing capabilities of systems and managers, performance management information use (Meijer 2015; Moynihan 2010), and public service delivery (Barber 2015). Already, the key issue facing public decision makers is an overabundance rather than a shortage of relevant policy and performance data. Most current public managers who are not heavily specialized in information technology lack even a basic understanding of what this overabundance means, let alone possess the skillset and mindset required to leverage these data. Many citizens, particularly younger generations, already far outperform the existing stock of public servants in this area. This fact, in conjunction with citizens’ increasing demands for transparency in how governments use data to plan and justify their decision making, poses immense pressure on public agencies and their leaders. One such threat is the increasing incidence of cybersecurity threats, including the rise of “hacktivists” (RAND 2013). “Great Expectations”: Individualism and Demands for Unlimited Transparency A second trend, reinforced by technological advancements, is captured by labels like the “rise of the individual” (KPMG 2013), “great expectations” (Needham and Mangan 2016), and “individualism and value pluralism” (Vielmetter and Sell 2014). The thrust of this trend is that technology and education have empowered individuals, and younger generations in particular, with massive improvements in literacy (now at a global rate of 84 percent), participation of women in the workforce, and a rapidly expanding middle class (KPMG 2013; UNDP 2013). By 2030, the global middle class will double from around 30 to around 60 percent of the population, with 80 percent residing in the developing world, particularly Asia (Brookings 2010; Mahbubani 2013). This increasingly empowered, vocal, participatory, and critical middle class, armed with high-speed, internet-powered smartphones, will keep governments on their toes, or ultimately remove them from power. This dynamic is particularly prominent in more hierarchical and authoritative cultures and regimes – think of the Arab Spring in 2011 or Occupy Central

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12  Handbook on corruption, ethics and integrity in public administration in Hong Kong in 2014 and 2019 – where social media plays a role in three key dynamics: organizing protests, shaping the narrative, and putting pressure on the international community (KPMG 2013). Such dynamics will fundamentally change the way in which regimes and the public servants that represent them have to interact, communicate, and collaborate with stakeholders and citizens. In short, governments need to become “more open, more innovative, more responsive, and smarter” (Deloitte 2010: 38). Are “great expectations” a hype? No, events that have been unfolding for some time now rather point at a steady decrease of the self-evidence of (traditional) authority, with the backlashes and defensive responses of authoritarian regimes being a natural reaction. “Forever Young”: Demographics, Fertility, and Ageing A third cluster of trends related to individuals has to do with demographic dynamics. Birth rates throughout the developed world are going down and individuals are ageing. It is estimated that in 2030, 13 percent of the world’s population will be aged 65 or above, compared with 8 percent today; by 2050, one in five persons will be elderly (INIA 2013). Population ageing is mainly caused by two factors. First, birth rates over time have on average declined from 37 per 1,000 in the 1950s to 24 in the 1990s, and are projected to fall to 16 per 1,000 by 2035 (UNDP 2013). The United States (US) is a notable exception to most developed countries as its population is still expected to increase for decades to come. However, as the vast majority of new births takes place among immigrants, this trend poses its own political and policy-related problems (in a sense, many European countries face an exaggerated version of this problem as their “indigenous” population is ageing and shrinking even more rapidly, exacerbated by recent waves of refugees). Second, individuals are living longer. The European Union, Australia, the US, China, Japan, Korea, and Russia are expected to see a dramatic increase in the number of 65+ year olds and 80+ year olds between now and 2040 when most of these countries will peak (Rodrigues et al. 2012; UNDP 2011). To illustrate: 174 million people in Europe and North America are now aged 65 years or older, 40 million people more than 20 years ago. And increasing and accelerating improvements in healthcare technology will push up this number to heights that are hard to predict today. Will elderly be “forever young” (Dickinson et al. 2019) just a few decades from now? Interestingly, the developing world shows a completely different dynamic. Ninety percent of the global youth lives in developing countries (KPMG 2013), and a rapidly developing country such as India is estimated to add 1 million people to its labour force every month between now and 2030 (ADB 2011). It goes without saying that the implications for governments across the world are immense. Clearly, the developed world has already started to fundamentally rethink its pension systems, elderly care arrangements, housing, and overall fiscal policies, and how and by whom these should be financed and delivered (Alford and O’Flynn 2012; KPMG 2013). In a way, this process was aided and accelerated by the global financial crisis in 2008 and 2009. However, in the developing world the key issue is achieving economic growth levels that allow the economy to absorb ever growing numbers of youths looking for jobs, in conjunction with upgrading the educational backgrounds and skills needed for twenty-first-century jobs. This struggle is experienced by many countries across Africa, Asia, and Latin America (and increasingly, Southern Europe as well).

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Trends and drivers of public administration  13 So, while the overall global workforce will be shrinking, this process will be very unevenly skewed towards the developed world. Beyond the obvious consequences for healthcare, housing, and healthcare policies, public-sector organizations, in human resource management terms, will witness unprecedented “star wars”: wars for talent between organizations to prevent a much feared “leadership cliff” (Van der Wal 2017b; Vielmetter and Sell 2014: 108). “Economic Interconnectedness”: Convergence, Contagion, and Regulation Moving from megatrends in the individual domain to the global economic domain, a key issue is how technology and the rise of the individual affect the nature, shape, and size of the global economy, which in turn largely determines the agendas and playing fields of public administrations. KPMG (2013: 26) labels this trend “economic interconnectedness”. Free trade and international investment have seen an immense surge just over the past decade: global trade as share of gross domestic product (GDP) has increased from 40 percent in 1980 to about 60 percent in 2014 (Economist 2014; World Bank 2014). Moreover, global growth in trade is expected to continue at about 5 percent annually between now and 2030 (HSBC 2015; KPMG 2013), with 80 percent of the current trade agreements in force having been introduced since 1990 (Arestis 2012). Mahbubani (2013) suggests that increasing economic interconnectedness will also lead to a “great convergence” of cultural and political discourse, management thinking, and educational strategies across the globe and between the East and West in particular. Again, there are stark differences between countries and regions here, as the next two megatrends will show. In addition, as with most of the trends identified here, risks and opportunities go hand in hand, as KPMG (2013: 26) concludes: There are also new challenges as economies are increasingly connected to risks beyond national borders. These risks not only move quickly, they also defy the scope of national regulation, demanding international cooperation. As the trend toward increased economic interconnectedness is expected to continue, governments throughout the world will need to ensure that they have the policy frameworks in place to capture the benefits of trade and manage the risks.

The global economic shocks caused by the bankruptcy of one large US bank in 2008 are a case in point. In response to the crisis, countries around the world have introduced similar economic regulations, showing regulatory convergence unthinkable before the crisis. In addition, Foroohar (2015, 2016), Stiglitz et al. (2015), and others have shown that the “enabling technology” and “economic interconnectedness” this chapter discusses increasingly benefit the top and bottom of the labour market rather than the entire population; in fact, the rise of the middle class in many developing countries will go hand in hand with the decline of the traditional middle class in Western countries. This, in turn, has inspired recent waves of economic populism and “neo-protectionism” in various developed economies, and the China–US trade war in 2019. Time will tell whether this is just a blip in the continued economic globalization of the past decades or whether economies will become more unbundled and detached in the years to come. Moreover, growth in some of the emerging economies that were predicted to dominate the world economy just a decade ago – some of the BRICS countries (Brazil, Russia, India, China, South Africa) for instance – has stalled dramatically in recent years. At the same time, global interest rates seemed to have reached a historic low that has been perpetuated for an unusually long period of time, with rates even being negative in large parts of the developed world where

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14  Handbook on corruption, ethics and integrity in public administration low growth seems to be the new normal (Foroohar 2016). In an increasingly connected world, penetrating new markers that are immune to these developments become increasingly hard, if not impossible. The impact on politics and policy are evident. Public leaders will play a key role in mitigating the protectionist and nationalist frustrations of citizens and advising their elected bosses about how to best respond to such demands. “More with Less”: Public Debt and Fiscal Pressures One of the most profound public-sector trends in the developed world has been the massive growth of public debt and the resulting fiscal pressures; just between 2007 and 2014, net debt to GDP ratios in developed countries has ballooned from 46.3 percent to almost 80 percent (IMF 2014). The demographic trends discussed earlier will only exacerbate public debt and accompanying fiscal pressures, and the increasing demands of citizens from their governments to “deliver” (Noordegraaf 2015; ‘t Hart 2014) will make it harder to postpone or mystify fiscal decision making. In short, governments will permanently have to do “more with less”. In fact, given the investments in capacity building that many of the other trends require to make public sectors and their managers “future proof”, they will face severely constrained investment potential. In a way, this trend seems puzzling given the projections of growing global trade highlighted before. However, once again striking differences exist between countries. For instance, Europe, the US, Australia, and Japan are growing modestly and will see their ageing-related public expenditures alone increase by 4.4 percent of GDP between now and 2030 (IMF 2013). In contrast, parts of the developing world, where most of the global growth will be achieved in the next two decades, and where populations are much younger, will not see such dramatic increases in public spending. These observations bring us to the megatrend on global power shifts, including the much discussed emergence of a “new Asian hemisphere” (Mahbubani 2008), the “rise of Asia” (Vielmetter and Sell 2014), “Asian century” (Bice et al. 2018), “the silk highway” (Melbourne School of Government 2013), or most provocatively, in the form of a book title, “When China rules the world: the end of the Western world and the birth of a new global order” (Jacques 2009). “Global Power Shifts”: The Asian Century and the Multi-Polar World To start with, the estimate that 57 percent of global GDP will be generated by developing countries in 2030 (OECD 2010), with the BRIC countries amounting to 36 percent (compared to 18 now) and averaging annual growth rates of 8 percent (Roland Berger Strategy Consultants 2011), are amazing facts as such. However, these numbers pale in comparison with the economic rise of Asia, and China and India in particular. For example, just 35 years ago, the US share of global national product in purchasing power parity terms was 25 percent while that of China was 2.2 percent; by the end of 2014, the US share stood at 16.2 percent and China at 16.4 percent (IMF 2014). This is the first time in 200 years that the largest economy in the world has been non-Western (Mahbubani 2013: 17). The middle class in Asia is expected to explode in less than a decade, from 500 million in 2015 to 1.75 billion people around 2020, with China’s middle class expected to double to 1.1 billion people (Roland Berger Strategy

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Trends and drivers of public administration  15 Consultants 2011). These are tectonic economic power shifts. Much of the economic growth, trade, and traffic of goods and services in the next decades will take place on the new “silk highway” (Melbourne School of Government 2013: 4). It goes without saying that these economic shifts will lead to political, diplomatic, cultural, educational, and military power shifts as well, many of which are occurring as we speak. For instance, between now and 2020, acquisitions of foreign companies by Chinese firms are set to quadruple (Wolf 2011). In early 2016, the China-initiated Asian Infrastructure Investment Bank (AIIB) took off, supported by various European countries but not joined by the US. China will own 30 percent of the shares. AIIB is seen as an important tool for China to further enlarge its influence and interests in the region. As we speak, one country after the other is signing up to support and participate in AIIB while the US remains a staunch and increasingly isolated adversary. The US position provoked unusually sharp remarks from China’s finance minister Lou Jiwei when outlining the AIIB proposal in 2015: “For decision-makers in the US, they really have to be reminded that if they do not jump on the bandwagon of change in time, they will soon be overrun by the bandwagon itself.” With new economic and political ties being forged and broken faster than before and old powers moving up and down the global economic and diplomatic food chain, the world is now more “multi-polar” than it has been in the past two centuries (see Kaplan 2009). Clearly, the impacts of these shifts for governments and public managers depend on their locus and focus. However, I would challenge the notion that global economic trends and international developments only affect those working in foreign relations and trade departments. In fact, it is likely that all public management work will internationalize and globalize in the decades to come (cf. KPMG 2013; ‘t Hart 2014), whether public officials like it or not. Governments in the West will increasingly have to get accustomed to a new normal in which Asian (and to a lesser extent African and Latin American) forces are driving their agendas, rather than the other way around. For governments in Asia, and particularly in countries whose economic and political clout is rapidly increasing, these developments imply that they have to facilitate their governments to lead rather than follow, to create rather than obstruct global agendas, and to obtain and maintain the roles and capabilities their new status requires: “noblesse oblige”. An inward-looking and protectionist mindset is the last thing that public sectors should develop, but this is exactly what is happening in many parts of the world. “Ultra-Urbanization”: Megacities as Nodes of Growth and Governance In today’s world, just 600 cities house around 20 percent of the world’s population and generate 50 percent of global GDP (McKinsey Global Institute 2012). Emerging “megacities” are sprawling out and expanding into autonomous centres of economic activity and governance, with 80 percent of urbanization between now and 2030 taking place in Africa and Asia (UNDP 2013). In 2030, 60 percent of the world’s population will live in cities (compared to 50 percent now), and more than 90 percent of the developed world will live in cities. Simultaneously, the world’s population will grow by more than 1 billion (KPMG 2013), with obvious consequences for economic development and disparity between rural and urban areas. In addition, the number of so-called megacities with populations of over 10 million will double to around 40 in 2030. Such developments have immense consequences for infrastructure investment,

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16  Handbook on corruption, ethics and integrity in public administration social inequality, crime, and liveability – with no change in policy, the number of people living in slums will double from 1 billion today to 2 billion in 2030 – and pressures towards sustainable development (KPMG 2013; OECD 2008). Less resourced and developed “secondary” or second-tier cities (Storey 2014) are also emerging. Indeed, in the coming decades, much of the economic development in developing countries will happen here: China already has 135 such cities with populations between 1 and 10 million (Storey 2014). Increasingly, mayors and city managers of such cities take the stage and drive policy and management agendas, often in competition with and at the displeasure of national governments. Some observers suggest that policy innovations and experimentation, and the creative leadership and collaborations they require, increasingly take place at the city level. Others have speculated about what would happen If mayors ruled the world, as the much hyped book by Benjamin Barber (2013) is titled (with the telling subtitle Dysfunctional nations, rising cities). Like most of the other megatrends, “ultra-urbanization” creates as many risks and threats as opportunities. As cities increasingly attract populations and economic growth, but central governments continue to hold and distribute the majority of government budgets, public servants will have to bargain and broker. They will have to align “the resource demands of their jurisdictional responsibilities, rights to revenue and incentives” and “formulate cross-jurisdictional and cross-governmental planning forums and mechanisms that support integrated planning” (KPMG 2013: 48). “More from Less”: Resource Stress, Environmental Depletion, and Climate Change In many ways, climate change and resource stress can be perceived as downsides of the previous trends. As phrased by the Melbourne School of Government, we have to get “more with less” (2013: 3). A recent ADB report (2013) predicts the “rise of Asia” alone means the region’s oil consumption will double, natural gas consumption will triple, and coal consumption will rise 81 percent by 2035. In turn, 75 to 80 percent of the costs of adaptation to climate change will be shouldered by the developing world, with East Asia and the Pacific region bearing most of these expenses (World Bank 2010). Global warming has become the key frame in recent discussions about the environment but still seems “far off” and far away to many public managers, although things are beginning to shift after a historic global agreement to substantively cut back emissions was reached at the COP21 meeting in Paris in December 2015. However, what is already directly and significantly affecting their operating environments is the intertwined dynamics of environmental depletion and resource scarcity. For instance, as global energy consumption will increase by around 25 percent until 2030 and total annual water demand will increase more than 50 percent, even the most positive scenario in terms of renewable energy use and technological advancement cannot prevent almost half of the world’s population from living in “areas of high water stress” (Roland Berger Strategy Consultants 2011). Global demand for food will rise while growth rates in global agriculture will fall, exacerbated by the depletion of clean water needed to support increasing agricultural efficiency. Raw materials such as indium and gallium, which are needed for the technologies to mitigate the abovementioned developments, will most likely decrease (Roland Berger Strategy Consultants 2011). Like many of the other trends discussed here, numerous dynamics interrelate and accelerate each other, leading to immense challenges for govern-

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Trends and drivers of public administration  17 ments in mitigating, planning for, and adapting to a world in which “more from less” will coincide with “more with less”. It is true that “technophiles” like Apple chief executive Tim Cook, Tesla chief executive Elon Musk or New York Times journalist Thomas Friedman argue that ongoing technological revolutions and advancements will help us in overcoming most of these problems. Indeed, a hopeful sign is that investments in renewable energy and “clean tech” have gone up dramatically in recent years, surpassing investments in fossil fuels for the first time ever in 2015, and have continued to so ever since (NEO 2019). However, for many governments, particularly those in underdeveloped settings, acquiring – let alone leveraging – these technologies (if they can even deliver as promised), requires massive upgrading of human capital and management development and training systems. Even more important, they will require shifts in current attitudes towards organizational and individual learning and cultures of experimentation.

IMPLICATIONS FOR PUBLIC AGENCIES AND PUBLIC SERVANTS As a result, public servants and organizations are faced with a “cascade” (Noordegraaf 2007) of multi-faceted and contradictory demands which, in turn, result in complex public service dilemmas. A key question here is to what extent public servants are actually able and capable to affect – let alone drive – these dynamics. Often, they will feel as if these demands are simply placed upon them by “higher powers” and “larger forces”, including political bosses and their electoral pressures and promises, or international market and governance actors. Interesting questions for teaching and research include: How can public servants move from default to crafted mode (Gratton 2011)? How can they ensure they are “at the wheel” rather than “under fire” (Noordegraaf 2004) and turn demands and dilemmas into opportunities? Not all of these demands and dilemmas are necessarily unique or new. Indeed, the observation that “competing values” (Cameron and Quinn 1989: 32) and “competing logics” (Noordegraaf 2015: 64) dominate organizational environments has been around for quite some time. Various authors have addressed the “multiplicity” and “ambiguity” of public-sector settings before (March and Olsen 1989; Brandsen and Pestoff 2006: 1). However, the magnitude and interrelatedness of twenty-first-century trends and drivers mean that new demands and dilemmas will be: ●● ●● ●● ●●

the norm rather than the exception; mutually reinforcing and exacerbating (with decreasing predictability); affecting all types of public managers rather than just those at the very top; and affecting the nature and practice and not just the content of (public administration) work.

Vielmetter and Sell (2014: 141) use the concept of reinforcers in pointing out “powerful consequences that result from – and are thus reinforced by – two or more megatrends in tandem. The nature of these reinforcers is such that they are intimately linked and therefore overlap to a degree.” Just as with the megatrends, their reinforcers show a remarkable overlap with future challenges for public servants identified in various recent writings, with different authors adding their own flavours, accents, and priorities (e.g., Dickinson et al. 2019; Needham and

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18  Handbook on corruption, ethics and integrity in public administration Mangan 2016; ‘t Hart 2014; Van der Wal 2017a). Box 2.1 lists the key consequences and challenges produced by global megatrends.

BOX 2.1 GLOBAL MEGATRENDS: CONSEQUENCES FOR PUBLIC SERVANTS 1. 2. 3. 4. 5. 6. 7.

Stakeholder dynamics, a multiplication of – more ambiguous – interests that must be taken into consideration. Collaborative modes of working in co-producing stakeholder networks requiring power sharing, use of new media, and open innovation. Power shifts away from traditional to new authorities, and more frequent and sudden authority shifts from one leader or constituency to another. Increased legitimacy and performance requirements towards an increasingly assertive, savvy, and scrutinizing array of stakeholder networks. New working practices, the emergence of new types of work, working, and workers due to technological revolutions, changing attitudes towards work, and new generations of employees. Pressures for smarter organizing and budgeting due to scarcity of talent and natural resources and the use of advanced technology in an era of low growth and austerity. Ethicization, a demand for the highest ethical standards from organizations and their servants.

Source: Dickinson and Sullivan 2014; Needham and Mangan 2016; ‘t Hart 2014; Vielmetter and Sell 2014; Van der Wal 2017a.

Clearly, this operating environment poses various challenges to public servants and organizations. However, emerging developments also provide exciting opportunities for achieving unprecedented levels of public service excellence, together with citizens and vanguards of change from other sectors. In order to turn challenges into opportunities, twenty-first-century public servants need to acquire and display a variety of skillsets and mindsets. Why “Public” Servants Are Different At the same time, the nature of what makes public servants and organizations “public” implies that changes and reforms are by definition less radical and drastic than in corporate environments. Indeed, despite decades of discussing new types of public management and public managers, one key aspect will always differentiate them from business managers. This key aspect is their additional onus on upholding public values and interests, and safeguarding institutional integrity without overstepping the politician’s comfort zone (Rhodes 2016; Terry 1995). No matter how networked, multi-channelled, and innovative the operating environment of twenty-first-century public servants becomes, or how many private sector-inspired tools, techniques, and approaches they emulate, they will remain conservators and stewards of the public interest (Watt 2012). Moreover, much of the discourse on private sector-oriented and cross-sectoral network management seems to ignore how legal and constitutional responsibilities and mandates of public servants have remained in place (Rosenbloom 2015; Van der Wal 2011). Indeed, many of the responsibilities and qualities of public servants are institutional rather than transformational.

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Trends and drivers of public administration  19 Stressing the uniqueness of these responsibilities and constraints, some have compared public servants to “gardeners” who require time, patience, experience, and political awareness. They are quiet servants who are in “for the long haul” and their craft is compromise (Frederickson and Matkin 2007; ‘t Hart 2014). Terry even considers “the heroic or transformative model of leadership with the great man radically changing the organization and disdaining its existing traditions, a threat to institutional integrity” (1995: 44). Still, in recent years, a dazzling amount of scholarly articles and books as well as consultancy reports and government documents discuss the future public-sector workforce. According to such writings, “new style” public servants should be entrepreneurial and locally minded, display interpersonal skills and commercial savvy, master collaboration and communication, and lead and manage change, deliver projects and programmes, redesign services, and deliver them digitally (Dickinson et al. 2019; KPMG 2013; Needham and Mangan 2016; Alford and O’Flynn 2012; ‘t Hart 2014; Van der Wal 2017a). They should have the ability to operate in increasingly cross-sectoral, international, and co-producing networks in which citizens manage alongside public servants rather than being managed by them. A somewhat more fundamental, macro-level debate concerns the future of twenty-first-century work (Gratton 2011). Issues discussed include the emergence of non-routine, spontaneous, and teamwork, “remote” and “virtual” office settings, and the increase of simulation and experimentation. Others emphasize “social media literacy” and big data analytical skills (Deiser and Newton 2013), and the disruptive effects of technology and robotization on the future of work, jobs, and job security (World Economic Forum 2016). A contrasting perspective is offered by acclaimed political scientist Rod Rhodes (2016: 638), who recently suggested that in an era of networked governance public managers should retreat from business-like skills and approaches to return to six classical qualities or administrative “crafts”. The six crafts he puts forward are counselling, stewardship, prudence, judgement, diplomacy, and political nous, referred to by others as political savvy, political antennas, or “political astuteness” (Hartley et al. 2015).

PUBLIC ADMINISTRATION PARADIGMS ACROSS TIME Blending and Switching between Complementary Repertoires Clearly, the abovementioned megatrends and their implications for public servants require a multitude of different competencies, skills, and values in order for them to be affective in the years to come. As argued above, however, not all of these are necessarily new. Moreover, rather than arguing that the existing “stock” of public servants should simply be replaced by a new generation of tech-savvy specialists (or even robots and algorithms as some argue1), a more meaningful discussion concerns which repertoires of skills and values public servants need to master and combine, to remain effective in the years to come. In order to do so, it is useful to analyse how past repertoires, paradigms, and reforms have resulted in the current state of affairs in terms of the demands on and required qualities of public servants. Dozens of publications structure and sequence key chronological developments in the practice and theory of public administration, and define the characteristics of public servants (e.g., Lynn 2006; Noordegraaf 2015; Pollitt and Bouckaert 2017). Over time, we can distinguish

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20  Handbook on corruption, ethics and integrity in public administration three key ideal types of public servants that have emerged alongside changing views of the role of government and concurrent reform movements. Building on the recent work of ‘t Hart (2014) who speaks about “administrative craftsmanship 1.0, 2.0, and 3.0”, it is important to stress that these three repertoires blend with and complement each other in the daily life of public servants. Contrary to what is often suggested by scholars and practitioners, these three types have not simply replaced each other over time: it is not just “out with the old, in with the new”. In many ways, ideal type 1.0 still provides the “foundational software” for the upgraded applications and features of types 2.0 and 3.0. Type 1.0: The Traditional, Rule-Oriented Bureaucrat In the late nineteenth and early twentieth centuries, the practice of administration and the function of public administrators began to professionalize as bureaucracies grew and became more complex. Although some ancient kingdoms, dynasties, and rulers had long ago developed rather advanced practices of administering territories and institutions (see Rutgers 2005), the common practice in most countries at the time was that one became a public servant by chance or through nepotism, cronyism, or patronage. Two key influential thinkers here were Woodrow Wilson, who later became president of the US, and German sociologist Max Weber. In their pioneering texts they argued for a separate professional ethos and a set of core skills for administrators to detach them from the political sphere (Weber 1921; Wilson 1887). Weber outlined a set of principles for what became known as the ideal typical bureaucrat. This traditional rule-oriented bureaucrat is loyal to political mandates, neutral in her views of policies and programmes, impartial in executing and administering these policies and programmes, and efficient and lawful in organizing and operating her agencies. She derives her authority from in-depth domain knowledge and legal expertise. Weber’s thinking still very much influences how government agencies operate and how public employees are trained and recruited. Many public policies, programmes, services, and goods continue to be realized through the key delivery mode associated with the ideal type 1.0: the hierarchical, formalized, bureaucratic organization. The most commonly used label corresponding with this ideal type is Weberian public administration or Traditional Public Administration. Weber and his followers spoke of administrators, bureaucrats, or civil servants rather than public managers or servants, labels primarily associated with the ideal type 2.0, as the next section shows. At the same time, ideas on how early bureaucracies had to be organized were also influenced by engineer Frederick Winslow Taylor, famous for his concept of “scientific management” (1911: 7), which sought to improve the efficiency of factory operations in rapidly industrializing societies. Although Taylor’s ideas were primarily oriented towards the private sector, both he and Weber stressed operational efficiency and a belief in technical expertise and “scientific” methods to manage operations and institutions. Type 2.0: The “Business-Like”, Performance-Focused Manager The ideal type 2.0 public manager is a “manager” in a more normative sense as she is supposed to embody managerial, private sector-inspired tools, techniques, and values (Lynn 2006; Noordegraaf 2015). This ideal type emerged in the early 1980s in Anglo-Saxon countries such as Australia, New Zealand, the United Kingdom, and the US, as the introductory case suggests. Conservative governments in these countries wanted public-sector organizations to emulate

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Trends and drivers of public administration  21 practices of the private sector, which they considered superior to the increasingly bloated, unaffordable, and sometimes dysfunctional public bureaucracies. In the 1990s and beyond, governments across the globe pursued reforms that were fully or partly inspired by the notion of “running government like a business”. A key text here was the bestselling book Reinventing government by consultants David Osborne and Ted Gaebler (1992). They famously declared government had to “steer rather than row” (1992: 25). In the years that followed, competition, outsourcing, and privatization became key credos of many governments. The type 2.0, business-like performance-focused manager first of all wants to deliver value for money and produce measurable results; thinks in terms of “clients and customers” rather than citizens; steers and oversees operations that have been outsourced to other actors; and is expected to master managerial competencies rather than domain expertise. While the Weberian quality of efficiency is still emphasized, effectiveness and accountability are more important. Traditional Weberian values such as lawfulness, impartiality, expertise, and neutrality are not as emphasized, and in some ways are even associated with inert, conservative, and dreary bureaucratic mindsets. The key delivery modes associated with ideal type 2.0 are quasi-markets, contracts, and public–private partnerships, considered to deliver cheaper, better, and more responsive public services and goods. The dynamic mix of practices, views, and hypes corresponding with this ideal type has become best known as the New Public Management or NPM, as coined by Christopher Hood (1991) in a seminal article. NPM took shape very differently in various parts of the world. Type 3.0: The Networking, Relation-Focused Collaborator The ideal type 3.0 public leader is first and foremost a networker and collaborator. She operates in a context of “governance” rather than “government” (Rhodes 1996), in which the public sector is no longer the but rather one of the actors co-creating, co-designing, and co-producing services in horizontal and vertical networks. This ideal type emerged in the late 1990s and early 2000s alongside the realization that government could no longer “go it alone” in tackling complex, transboundary policy problems, and that the market was not a panacea either (Agranoff 2006; Alford and O’Flynn 2012; McGuire 2006). Civil society organizations and non-governmental organizations gained legitimacy and became more powerful and professionalized; citizens became increasingly assertive and educated; and businesses were more concerned with their social and environmental impact. All these “stakeholders” started to demand a place at the table in addressing as well as defining policy problems and solutions. In this vein, the type 3.0, networking, relation-focused collaborator is a skilled negotiator, communicator, enabler, and energizer who easily operates across sectors and issues while realizing authority and credibility have to be earned time and again from various stakeholders. Classical Weberian qualities are still important, but if emphasized too much, they may get in the way of allowing innovative non-state initiatives to flourish. For a type 3.0 public leader, the objective – the “what” – is leading, while the exact institutional or legislative configuration through which this objective is met – the “how” – is contingent and flexible. A key framework here is “public value”, as developed by Harvard Kennedy School professor Mark Moore (1995, 2013), which takes as a starting point the ultimate mission that public agencies and their managers try to achieve. In creating public value, public managers have to get constant buy-in

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22  Handbook on corruption, ethics and integrity in public administration from different and dynamic “authorizing environments”, extending way beyond politicians and voters alone. As such, the key delivery modes associated with ideal type 3.0 are networks, partnerships, and multi-sectoral collaborations with actors from a variety of sectors and jurisdictions. The term most commonly used for this set of practices and norms is New Public Governance or NPG, coined by Osborne (2010). Figure 2.1 visualizes ideal types 1.0, 2.0, and 3.0 as three interacting clusters of roles, competencies, and values. Successful twenty-first-century public servants will be able to smartly and astutely combine sometimes competing roles, competencies, and values depending on the audience, issue, and context at hand, and add new ones as operating environments continue to change.

Figure 2.1

Public servant 1.0, 2.0, and 3.0: three interacting modes

The ideal types were discussed chronologically, as each new ideal type is in some ways a response to its predecessor’s shortcomings. However, in reality public-sector renewal is a process of “recycling, alteration, and re-balancing”, according to the late Christopher Pollitt (2011), a leading expert in our field. Indeed, neatly separating and sequencing the types with start dates and end dates, as many textbooks and reports do, glosses over the hybrid realities in which public servants simultaneously employ elements from all three types.

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Trends and drivers of public administration  23 Van der Steen et al. (2015: 28) portray this hybrid reality of public servants as sedimentation to indicate that effective public servants combine the various repertoires corresponding with the three key paradigms in our field – traditional, “Weberian” public administration, NPM, and NPG that emphasize horizontal collaboration – in complementary ways. In their prioritization, such public managers are mindful of when repertoires come into or out of fashion, depending on context, key events, and the government of the day. As an example, in the aftermath of the global financial crisis in 2008, many governments re-emphasized the importance of a “strong state” while pointing out the shortcomings of markets, with some even suggesting undoing prior privatizations. Who would dare to display type 2.0 behaviour at that stage?

CHARACTERISTICS AND QUALITIES OF TWENTY-FIRST-CENTURY PUBLIC SERVANTS The overall trends and demands detailed in this chapter all point towards the need for public servants and agencies to become more adaptive, networked, communicative, entrepreneurial, innovative, smart, and agile. These traits increasingly apply to all functions and roles. However, some public servants will be more hardwired with these traits than others, or have more ability or talent to quickly learn and adapt to their changing environments. With this in mind, smart recruitment, training, and management-development practices will become even more important than they already are. Across the globe, public sectors aim to develop more strategic human resource management practices while future proofing their leadership programmes and competency frameworks (e.g., ABD 2016; APS 2019). Such programmes and frameworks emphasize how practices and ideas from past decades will prove to be relevant in new ways, and need not all be devalued and replaced (cf. Dickinson and Sullivan 2014: 54; Dickinson et al. 2019; Rhodes 2016). In outlining key characteristics for twenty-first-century public servants, various new questions emerge. One thing is important for that journey to be a meaningful and successful one: (aspiring) public servants need a serious voice and “agency” in shaping their own futures and the future of the public-sector workforce, as studies from various countries show they feel left out of that conversation so far (Dickinson et al. 2019; Needham and Mangan 2016; Van der Wal 2017a). Competencies and Values for Public Servants (from Traditional to New) Which specific competencies and values are required to display these twenty-first-century qualities? Based on the trends and demands discussed previously, Figure 2.2 provides an overview of traditional competencies and values and newer, increasingly necessary competencies and values for public servants. Are the Characteristics of Twenty-First-Century Public Servants Universal? Will public servants be able to acquire and enact these characteristics, regardless of whether they operate in the West, the Middle East, Asia, Africa, Latin America, or the Pacific? It is difficult to answer that question because no one knows how individual countries and regions

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24  Handbook on corruption, ethics and integrity in public administration

Figure 2.2

Traditional and new competencies and values for public servants

will continue to develop, how their public sectors will respond to megatrends, and whether their responses will converge. It is likely that public servants in liberal democratic environments will be more enabled to create space for collaboration, open innovation, and genuine stakeholder participation and crowd sourcing. Meanwhile, public managers in a context of traditional authority and respect (or fear) of seniority, and of government in general, may have considerably more leeway to swiftly execute much needed reforms and scale up and roll out large-scale innovations. Such large-scale implementation and reform will also be more straightforward in centralized, unitary systems than decentralized, federal systems, regardless of the specific political regime (Pollitt and Bouckaert 2017). Still, it is hard to imagine that countries and regimes will be able – and allowed – to isolate themselves altogether from the trends and demands outlined in this report, given the speed at which they travel in an interconnected, globalized world. Indeed, the daily work of public servants in any jurisdiction, sector, or policy area will continue to internationalize in the years to come. Even if they do, this may ultimately lead to suboptimal government performance. Consistent good performance, in turn, ultimately provides the legitimacy for public servants in any kind of system and regime.

NOTE 1.

www​.weforum​.org/​agenda/​2018/​10/​could​-robot​-government​-lead​-better​-current​-politicians​-ai/​

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Trends and drivers of public administration  25

REFERENCES ABD (2016). Nieuw publiek leiderschap. Den Haag: Algemene Bestuursdienst. ADB (2011). Asian development outlook 2011 update: preparing for demographic transition. Available at: www​.adb​.org/​publications/​asian​-development​-outlook​-2011​-update​-preparing​-demographic​ -transition (accessed 20 April 2020). ADB (2013). Asian development outlook – 2013: Asia’s energy challenge. Available at: www​.adb​.org/​ publications/​asian​-development​-outlook​-2013​-asias​-energy​-challenge (accessed 20 April 2020). Agranoff, R. (2006). Inside collaborative networks: ten lessons for public managers. Public Administration Review, 66(s1), 56–65. Alford, John, and O’Flynn, Janine (2012). Rethinking public service delivery: managing with external providers. New York: Palgrave Macmillan. APS (2019). The APS review. Canberra: APS. Arestis, P. (2012). Fiscal policy: a strong macroeconomic role. Review of Keynesian Economics, 1(1), 93–108. Barber, B. R. (2013). If mayors ruled the world: dysfunctional nations, rising cities. New Haven, CT: Yale University Press. Barber, M. (2015). How to run a government. So that citizens benefit and taxpayers don’t go crazy. London: Penguin. Bice, Sara, O’Flynn, Janine, and Sullivan, Helen (2018). Public policy in the “Asian century”: concepts, cases and futures. London: Palgrave Macmillan. Brandsen, Taco, and Pestoff, Victor (2006). Co-production, the third sector and the delivery of public services: an introduction. Public Management Review, 8(4), 493–501. Brookings (2010). The new global middle class: a cross-over from West to East. Wolfensohn Center for Development at Brookings, 1–14. Cameron, K. S., and Quinn, R. E. (1989). Diagnosing and changing organizational culture: based on the competing values framework. San Francisco, CA: Jossey-Bass. Castells, M., and Cardoso, G. (Eds) (2006). The network society: from knowledge to policy. Center for Transatlantic Relations, Paul H. Nitze School of Advanced International Studies, Johns Hopkins University, 3–23. Deiser, R., and Newton, S. (2013). Six social-media skills every leader needs. McKinsey Quarterly, 1, 62–7. Deloitte (2010). Unlocking government: how data transforms democracy. Available at: www2​.deloitte​ .com/​content/​dam/​Deloitte/​nl/​Documents/​public​-sector/​deloitte​-nl​-ps​-govlab​-unlocking​-government​ .pdf (accessed 19 March 2020). Dickinson, H., and Sullivan, H. (2014). Imagining the 21st century public service workforce. Melbourne: School of Government. Dickinson, H., Needham, C., Mangan, C., and Sullivan, H. (2019). Reimagining the future public service workforce. Singapore: Springer. Dobbs, R., Manyika, J., and Woetzel, J. (2015). No ordinary disruption: the four forces breaking all the trends. New York: Public Affairs. The Economist (2014). A troubling trajectory. Available at: www​.economist​.com/​news/​finance​-and​ -economics/​21636089​-fears​-are​-growingtrades​-share​-worlds​-gdp​-has​-peaked​-far (accessed 19 March 2020). Foroohar, R. (2015). Here’s the secret truth about economic inequality in America. TIME, 12 May. Available at: http://​time​.com/​3855971/​us​-economicinequality/​ (accessed 19 March 2020). Foroohar, R. (2016). Makers and takers: the rise of finance and the fall of American business. New York: Crown Business. Frederickson, H. G., and Matkin, D. S. (2007). Public leadership as gardening. In S. R. Morse, T. F. Buss, and C. M. Kinghorn (eds), Transforming public leadership for the 21st century. Armonk: M. E. Sharpe, 34–46. Gratton, L. (2011). The shift: the future of work is already here. London: HarperCollins. Hartley, J., Alford, J., Hughes , O., and Yates, S. (2015). Public value and political astuteness in the work of public managers: the art of the possible. Public Administration, 93(1), 195–211. Hood, C. (1991). A public management for all seasons? Public Administration, 69(1), 3–19.

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26  Handbook on corruption, ethics and integrity in public administration HSBC (2015). Trade winds: shaping the future of international business. London: HSBC Commercial Banking. IMF (2013). Global trends in public pension spending and outlook. Available at: www​.imf​.org/​external/​ np/​seminars/​eng/​2013/​oapfad/​pdf/​clements​.pdf (accessed 19 March 2020). IMF (2014). April 2014 fiscal monitor “public expenditure reform – making difficult choices”. Available at: www​.google​.com​.sg/​url​?sa​=​t​&​rct​=​j​&​q​=​&​esrc​=​s​&​source​=​web​&​cd​=​1​&​cad​=​rja​&​uact​=​8​&​ved​=​ 0ahUKEwjej92BqeHOAhVoCcAKHe​_FBhQQFggaMAA​&​url​=​https​%3A​%2F​%2Fwww​.imf​.org​ %2Fexternal​%2Fpubs​%2Fft​%2Ffm​%2F2014​%2F01​%2Fdata​%2Ffmdata​.xlsx​&​usg​=​AFQjCNGi4​ _V​_vJC0tUFg7Aww4VvQOsVpZg​&​sig2​=​rCyFdbNbqw6MSzra9rycgg​&​bvm​=​bv​.131286987​,d​.bGg (accessed 19 March 2020). INIA (International Institute on Ageing) (2013). World population ageing 2013. Malta: United Nations. Jacques, M. (2009). When China rules the world: the end of the western world and the birth of a new global order. New York: Penguin. Johansen, B. (2007). Get there early: sensing the future to compete in the present. San Francisco, CA: Berrett-Koehler. Kaplan, R. D. (2009). Center stage for the 21st century: power plays in the Indian Ocean. Foreign Affairs, 88(2), 16–29, 31–2. KPMG (2013). Future State 2030. London: KPMG. Lynn, Jr., L. E. (2006). Public management: old and new. London: Routledge. Mahbubani, K. (2008). The new Asian hemisphere: the irresistible shift of global power to the East. New York: Public Affairs. Mahbubani, K. (2013). The great convergence and the logic of one world. New York: Public Affairs. March, J. G., and Olsen, J. P. (1989). Rediscovering Institutions. New York: Maxwell Macmillan International. Mayer-Schönberger, V., and Cukier, K. (2013). Big data: a revolution that will transform how we live, work, and think. Boston, MA: Houghton: Mifflin Harcourt. McGuire, M. (2006). Collaborative public management: assessing what we know and how we know it. Public Administration Review, 66(s1), 33–43. McKinsey Global Institute (2012). Urban world: cities and the rise of the consuming class. New York: McKinsey Global Institute. Meijer, A. J. (2015). Bestuur in de datapolis. Den Haag: Boombestuurskunde. Melbourne School of Government (2013). The 21st century civil servant. A discussion paper. Melbourne: Melbourne School of Government and the Victorian Department of Premier and Cabinet. Moore, M. H. (1995). Creating public value: strategic management in government. Cambridge, MA: Harvard University Press. Moore, M. H. (2013). Recognizing public value. Cambridge, MA: Harvard University Press. Moynihan, D. P. (2010). Innumeracy in a world of numbers. Public Administration Review, 70(2), 332–5. Needham, C., and Mangan, C. (2016). The 21st century public servant: working at three boundaries of public and private. Public Money and Management, 36 (4), 265–72. NEO (New Energy Outlook) (2019). https://​about​.bnef​.com/​new​-energy​-outlook/​(accessed 19 March 2020). Noordegraaf, M. (2004). Management in het publieke domein: issues, instituties en instrumenten. Bussum: Coutinho. Noordegraaf, M. (2007). From “pure” to “hybrid” professionalism present day professionalism in ambiguous public domains. Administration and Society, 39(6), 761–85. Noordegraaf, M. (2015). Public management: performance, professionalism and politics. Basingstoke: Palgrave Macmillan. OECD (2008). OECD key environmental indicators. Paris: OECD. OECD (2010). The emerging middle class in developing countries. Working Paper No. 285. Available at: www​.oecd​.org/​dev/​44457738​.pdf (accessed 19 March 2020). Osborne, D., and Gaebler, T. (1992). Reinventing government: How the entrepreneurial spirit is transforming the public sector. Reading: Addison-Wesley. Osborne, S. P. (Ed.) (2010). The new public governance: emerging perspectives on the theory and practice of public governance. London: Routledge.

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Trends and drivers of public administration  27 Pollitt, C. (2011). 30 years of public management reforms: has there been a pattern? World Bank blog: Governance for development. Available at: https://​blogs​.worldbank​.org/​governance/​30​-years​-of​ -public​-management​-reforms​-has​-there​-been​-a​-pattern (accessed 20 April 2020). Pollitt, C., and Bouckaert, G. (2017). Public management reform: a comparative analysis – into the age of austerity. Oxford: Oxford University Press. RAND (2013). Cyber-security threat characterization. Available at: www​ .rand​ .org/​ pubs/​ research​ _reports/​RR235​.html (accessed 20 April 2020). Rhodes, R. A. W. (1996). The new governance: governing without government. Political Studies, 44(4), 652–67. Rhodes, R. A. W. (2016). Recovering the craft of public administration. Public Administration Review, 76(4), 638–47. Rodrigues, R., Huber, M., and Lamura, G. (Eds) (2012). Facts and figures on healthy ageing and long-term care. Vienna: European Centre for Social Welfare Policy and Research. Roland Berger Strategy Consultants (2011). Trend compendium 2030. Available at: www​.rolandberger​ .com/​gallery/​trend​-compendium/​tc2030/​content/​assets/​trendcompendium2030 (accessed 19 March 2020). Rosenbloom, David (2015). The constitution and a reasonable public servant. In Lily Xiao Hong Lee and David Rosenbloom (Eds), A reasonable public servant: constitutional foundations of administrative conduct in the United States. New York: Routledge, 3–18. Rutgers, M. R. (2005). Retracing public administration. Public Administration, 83 (1), 243–64. Stiglitz, J., Abernathy, N., Hersh, A., Konczal, M., and Holmberg, S. (2015). Rewriting the rules of the American economy. Available at: http://​rooseveltinstitute​.org/​rewriting​-rules​-report/​ (accessed 19 March 2020). Storey, Donovan (2014). Setting the scene: the rise of secondary cities. Presentation for the Asia Development Dialogue: Building Resilience and Effective Governance of Emerging Cities in ASEAN. t’ Hart, P. (2014). Ambtelijk Vakmanschap 3.0. De zoektocht naar het handwerk van de overheidsmanager. Den Haag: VOM. Taylor, H. F. (1911). Principles of scientific management. New York: Harper and Brothers. Terry, L. D. (1995). Leadership of public bureaucracies: the administrator as conservator. London: Sage. UNDP (2011). Human development report 2011: sustainability and equity: a better future for all. Available at: http://​hdr​.undp​.org/​sites/​default/​files/​reports/​271/​hdr​_2011​_en​_complete​.pdf (accessed 19 March 2020). UNDP (2013). Human development report 2013: the rise of the south: human progress in a diverse world. Available at: http://​hdr​.undp​.org/​sites/​default/​files/​reports/​14/​hdr2013​_en​_complete​.pdf (accessed 19 March 2020). Van der Steen, M., Scherpenisse, J., and van Twist, M. (2015). Sedimentatie in sturing- systeem brengen in netwerkend werken door meervouding organiseren. Den Haag: NSOB. Van der Wal, Z. (2011). The content and context of organizational ethics. Public Administration, 89(2), 644–60. Van der Wal, Z. (2017a). The 21st century public manager. London: Macmillan Education. Van der Wal, Z. (2017b). Future business and government leaders of Asia: How do they differ and what makes them tick? Journal of Business Ethics, 142(3), 603–16. Vielmetter, G., and Sell, Y. (2014). Leadership 2030: the six megatrends you need to understand to lead your company into the future. AMACOM Div. American Management Association. Watt, I. (2012). Reflections on my first year as secretary of the Department of the Prime Minister and Cabinet and thoughts on the future. Address to the Institute of Public Administration Australia, ACT Division, Great Hall, Parliament House, October, 5. Weber, M. (1921). The definition of sociology and social action. In Economy and society, Berkeley, CA: University of California Press, 4–26. Wilson, W. (1887). The study of public administration. Political Science Quarterly, 2 (2), 197–222. Wolf, Charles (2011). China’s next buying spree: foreign companies. Wall Street Journal. Available at: www​.wsj​.com/​articles/​SB100014240​52748704754304​576095880533686442 (accessed 19 March 2020).

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28  Handbook on corruption, ethics and integrity in public administration World Bank (2010). World development report 2010: development and climate change. Available at: http://​siteresources​.worldbank​.org/​INTWDR2010/​Resources/​5287678​-1226014527953/​WDR10​ -Full​-Text​.pdf (accessed 20 April 2020). World Bank (2014). Trade (% of GDP). Available at: http://​data​.worldbank​.org/​indicator/​NE​.TRD​ .GNFS​.ZS (accessed 19 March 2020). World Economic Forum (2016). The future of jobs. Geneva: World Economic Forum.

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3. Typologies of anti-corruption frameworks Jean-Patrick Villeneuve, Giulia Mugellini and Marlen Heide

INTRODUCTION Corruption is a multifaceted phenomenon that involves different types of actors, activities and behaviours.1 In the past decades, several corruption classifications have been proposed in order to identify corrupt behaviours with similar mechanisms and attributes (Rose-Ackerman 1999; Amundsen 1997; Beeri and Navot 2013; Morris 2011; Bussell 2015; Graycar 2015; Zhang and Vargas-Hernández 2017; Gupta 2017; Jancsics 2019). These classification schemes, however, have rarely been used to carve out suitable strategies for addressing different types of corruption. Moreover, while providing a useful systematisation of common approaches to countering corruption, existing classifications of anti-corruption interventions (Huberts 1998; Brunetti and Weder 2003; McCusker 2006; Lange 2008; Dish et al. 2009; Lambsdorff 2009; Blind 2011; Graycar 2015; Holmes 2015) are often unidimensional and do not reflect which policy options are left unexplored or insufficiently applied. This chapter categorises prevalent anti-corruption tools according to policy and corruption types. The resulting typology2 supports ongoing efforts to understand the strengths and weaknesses of different approaches to countering corruption. It serves to identify suitable anti-corruption interventions that consider both the policy problem (types of corruption) as well as the adequate policy response (anti-corruption intervention). The work presented in this chapter draws on a recent study conducted by Villeneuve, Mugellini and Heide (2019) which links criminological classifications of corruption with theoretical categorisations of policy tools.

COVERAGE AND AIM OF THE TYPOLOGY The typology covers interventions targeted at administrative corruption. This specific type of corruption is conventionally described in contrast to political corruption, which involves elected public officials and mainly aims at influencing the formulation of laws, regulations and policies, rather than their implementation (Gould 1991; Huberts 1998; Holmes 2015; OECD 2015: 28).3 In the words of Zhang and Vargas-Hernández (2017: xiv), “administrative corruption is the most widespread type of corruption and it is sometimes treated as a narrow term of public corruption”. According to the United Nations Convention Against Corruption, administrative corruption mainly entails: bribery of national public officials; bribery of foreign public officials and officials of public international organisations; embezzlement, misappropriation or other diversion of property by a public official (theft of state assets or diversion of state revenues); trading in influence; abuse of function; and illicit enrichment (UNODC 2004: 17−19). Other behaviours, such as favouritism, are not generally criminalised but could also lead to corruption (Esadze 2013). 29 Jean-Patrick Villeneuve, Giulia Mugellini and Marlen Heide - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:18PM via The University of British Columbia Library

30  Handbook on corruption, ethics and integrity in public administration The typology outlined in this chapter considers different types of administrative corruption as well as strategies to counter them. This classification is further embedded into a framework of policy types and deals with the fundamental strategies applied to address corruption as a policy problem. To structure the typology, the authors followed a four-step methodology aimed at linking existing policy tools to the characteristics of corruption and of anti-corruption practice. First, they identified a classification of policy types (Howlett 2010) to form the core of the typology. They then identified common anti-corruption tools – by reviewing toolkits, guidelines and manuals developed by relevant supra-national donor agencies and non-governmental organisations4 and subsequently categorised them according to the policy type they represent. Finally, each tool was categorised according to the mechanism of the policy intervention and the type of corruption it seeks to address. The choice of focusing on anti-corruption mechanisms addressed by international organisations acknowledges their leading role in creating the main conventions against corruption and, as a consequence, in shaping strategies for prevention and control. Focusing on their anti-corruption mechanisms provides an overview of the current international framework in which national and local anti-corruption policies are embedded. As a result of the above-mentioned methodological process, the typology of anti-corruption policies is centred around three main dimensions: a. type of policy tool; b. mechanism of prevention/intervention; and c. nature of administrative corruption (motivation and type of gain). The paragraphs below describe the content of these three dimensions and provide examples related to anti-corruption policies. See Table 3.1 for results.

DIMENSIONS OF THE TYPOLOGY Type of Policy Tool As the majority of anti-corruption efforts take the form of policy interventions, the field of anti-corruption would benefit from a more interdisciplinary perspective considering public policy studies. To do so, the typology presented herein draws on Howlett’s much cited typology of policies (2010) presenting a variety of approaches to designing and implementing policy interventions. At its broadest level, Howlett (2010) distinguishes between four different types of policy: 1. Organisational implementation tools, “rely upon the use of government institutions and personnel to affect policy output delivery and policy process change” (Howlett 2010: 63). 2. Authoritative implementation tools, “primarily involving and relying on the ability of governments to direct or steer targets in the directions they would prefer them to go through the use of the real or perceived threat of state-enforced sanctions” (Howlett 2010: 83). They exploit both “positive” mechanisms to encourage behaviours compliant with government goals (e.g., disclosure systems of assets and liabilities) and disciplinary measures by preventing or discouraging corrupt behaviours (e.g., the loss of a job or civil or penal sanctions).

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Typologies of anti-corruption frameworks  31 3. Financial implementation tools mainly involving the transfer of treasure resources to or from specific public actors in order to encourage them to perform some activity (financial incentives) or to discourage them (financial costs) (Howlett 2010: 101). 4. Information-based implementation tools, relying on the use of information (knowledge and data) available to governments to influence consumer and producer behaviour according to government aims, and/or collect information in order to update their aims (Howlett 2010: 115). The above-mentioned types of policies can be further broken down according to the nature of the policy, whether substantive or procedural. Substantive policies concern “a set of alternative arrangements potentially capable of resolving or addressing some aspect of a policy problem” (Howlett 2011: 11). Procedural policies entail “a set of activities related to securing some level of agreement among those charged with formulating, deciding upon, and administering that alternative” (Howlett 2011: 11). These elements lead to the following classifications of policy tools. 1.1. Substantive organisational implementation instruments refer to those affecting both the production and consumption/distribution of goods and services in society. An additional distinction can be made depending on the proximity of the policy tools to government and the ability of government to control the effects of their utilisation. Therefore, organisational substantive instruments can either be implemented through agencies and structures created and controlled by government organisations (1.1.1. Direct use of government agencies and mechanisms), or through indirect or supra-national ones (1.1.2. Indirect use of government organisations for policy purposes) by, for instance, providing human resources with appropriate systems for preventing corruption risks while recruiting, hiring and retaining public officials. Four-eyes mechanisms, such as assigning specific responsibilities to appropriate employees for authorising transactions and activities, are an example of how to use internal governmental resources to prevent corruption more indirectly. 1.2. Procedural organisational implementation instruments involve the use of organisational resources of government (personnel, staffing, internal procedures, etc.) to alter or affect policy processes to produce the needed result (Howlett 2010). These instruments are mainly linked to the selection of appropriate actors and resources that can shape the operating context of the governmental agencies in order to cope with potential corrupt behaviours. These instruments include, for instance, the reorganisation of specific government agencies (e.g., decentralisation, staff rotation, etc.) (1.2.1. Institutional change), or the creation of specific agencies, task forces, commissions (e.g., anti-corruption agencies, ad hoc anti-corruption task forces and inquiries) (1.2.2. Creation of institution). According to Howlett (2010: 78), organisational implementation tools are costly because they rely on government personnel mainly funded through taxes. 2.1. Among substantive authoritative instruments we can find direct and indirect government regulations (2.1.1 and 2.1.2) through which government “requires or proscribes certain activities or behaviors… and does so through specially designated regulatory agencies” both governmental and non-governmental (Howlett 2010: 79) (e.g., the development of codes of ethics or oversight by government agencies) and market creation and maintenance (2.1.3), such as partnerships against corruption that support enterprises not to enter into business with corrupt partners or markets.

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1. Organisational implementation tools

instruments

(Awareness)

Raising awareness

(↔Incentive)

Changing the incentives

(↔Risk)

Changing the risk/reward

(↔Effort)

Changing the effort

prevention/intervention

2. Mechanism of

1.2.2. Creation of institution

1.2.1. Institutional change

policy purpose

Awareness

↔Effort

Awareness

Collusive

↔Risk

Extortionary

Extortionary

Collusive

Extortionary

Collusive

Collusive

Collusive

Collusive

Collusive

Collusive

Collusive

Extortionary

Collusive

corruption

T.G. & I.G.

T.G. & I.G.

T.G. & I.G.

T.G. & I.G.

T.G. & I.G.

T.G. & I.G.

T.G. & I.G.

T.G. & I.G.

T.G. & I.G.

Intangible gain (I.G.)

Tangible gain (T.G.)

3. Nature of corruption 3.1. Motivation for 3.2. Type of gain

↔Effort

government organisations for ↔Effort

1.1.2. Use of indirect

purpose

mechanisms for policy

government agencies/

1.1.1. Direct use of

1. Policy tool

Typology of anti-corruption policies

1.1. Substantive organisational instruments

organisational

Table 3.1

Raising public awareness on anti-corruption bodies

Establishing anti-corruption body

Training in ethics

persons

Leniency programmes and protection of reporting

Staff rotation

External controls

correct application of the rules or procedures

decisions to facilitate the subsequent verification of the

Use of objective and predetermined criteria for

employees for authorising transactions and activities

Assigning specific responsibilities to appropriate

Corruption risk assessment

officials

Systems for promotion and retirement of public

officials

Systems for recruitment, hiring and retention of public

Examples of anti-corruption policies

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1.2. Procedural

2.1. Substantive authoritative instruments

authoritative

instruments

tools

activation and mobilisation

2.2.1. Policy network

maintenance

2.1.3. Market creation and

regulation

Indirect government

2.1.1./2.1.2. Direct and

1. Policy tool

T.G. & I.G.

Extortionary

Extortionary

Extortionary

↔Effort

Awareness

Extortionary

TG. & I.G.

T.G. & I.G.

T.G. & I.G.

T.G. & I.G.

T.G. & I.G.

Collusive Extortionary

T.G. & I.G.

T.G. & I.G.

Collusive Extortionary

T.G. & I.G.

I.G.

Collusive Collusive

T.G.

Collusive

corruption

3. Nature of corruption 3.1. Motivation for 3.2. Type of gain

Awareness

↔Effort

Awareness

↔Incentives

↔Risk

↔Effort

prevention/intervention

2. Mechanism of

markets

Disseminating information on corrupt businesses or

recommendations and develop memoranda of intent

Creating networks of experts to provide

markets

Disseminating information on corrupt businesses or

entering into business with corrupt partners or markets

Creation of partnering against corruption to avoid

Codes of conduct for public officials

Corruption Agency through audits and investigations

ombudsman, supreme audit institution and the Anti-

Oversight by government agencies such as Parliament,

Disciplinary measures

Disclosure systems of conflict of interest

benefits

Disclosure systems of assets and liabilities, gifts and

Examples of anti-corruption policies

Typologies of anti-corruption frameworks  33

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2.2. Procedural

2. Authoritative implementation tools

3.2. Procedural

3.1. Substantive financial

financial

instruments

instruments

tools

creation and mobilisation

3.2.1. Policy network

incentives

3.1.2. Negative financial

incentives

3.1.1 Positive financial

1. Policy tool

Awareness

↔Risk

↔Risk

prevention/intervention

2. Mechanism of

Extortionary

Collusive

Extortionary

Collusive

Extortionary

Collusive

corruption

T.G. & I.G.

T.G. & I.G.

I.G.

T.G.

3. Nature of corruption 3.1. Motivation for 3.2. Type of gain

Funding research into anti-corruption

Fines for civil servants

compliance

procurement for institutions/businesses promoting

Systems of promotion and careers; preferential

public services

bonus for efficient civil servants and vouchers for

guarantees for efficient civil servants, promoting

systems of bonus; favourable insurance and loan

Raising wages of civil servants, or implementing

Examples of anti-corruption policies

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3. Financial implementation tools

instruments

instruments

4.1. Substantive informational

4.2. Procedural informational

prevention tools

4.2.2. Information release

tools

4.2.1. Information release

knowledge collection tools

4.1.2. Information and

dissemination tools

4.1.1. Information

1. Policy tool

integrity)

↔Incentives (value

↔Effort

Awareness

integrity)

↔Incentives (value

Awareness

Extortionary

T.G. & I.G.

T.G. & I.G.

T.G. & I.G.

Collusive

T.G. & I.G.

Extortionary

T.G. & I.G.

T.G. & I.G.

T.G. & I.G

T.G. & I.G.

Collusive

Collusive

Extortionary

Extortionary

↔Incentives (value integrity)

Collusive

↔Effort

Extortionary

(Anonymous) external reporting of corruption

Censorship, official secrets act, privacy acts

Administrative practices for requests and appeals

employees for authorising transactions and activities

Assigning specific responsibilities to appropriate

making processes

Promoting the contribution of the public to decision-

departments to submit their complaints in writing

Access to a single window system across government

(Anonymous) reporting of corruption

Raising public awareness and education on corruption

–

Awareness

Administrative practices for requests and appeals T.G. & I.G.

Collusive

–

Extortionary

regarding services from every department

names of beneficiaries, and a summary of benefits

Proactive disclosure through wall paintings of the

integrity)

T.G. & I.G.

T.G. & I.G.

Examples of anti-corruption policies

Collusive

Extortionary

Collusive

corruption

3. Nature of corruption 3.1. Motivation for 3.2. Type of gain

↔Incentives (value

↔Effort

prevention/intervention

2. Mechanism of

Typologies of anti-corruption frameworks  35

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4. Information-based implementation tools

36  Handbook on corruption, ethics and integrity in public administration 2.2. Procedural authoritative instruments are mainly related to policy network activation and mobilisation (2.2.1) through the selection and activation of policy actor support (e.g., advisory councils, networks of experts, etc.). 3.1. Substantive financial implementation tools concern “specific techniques of governance involved in transferring treasure resources to or from other actors in order to encourage them to undertake some desired activity through the provision of financial incentives, or to discourage them through the imposition of financial tools” (Howlett 2010: 101). They can be grouped according to the type of incentives they exploit. Positive financial incentives (3.1.1) entail the financial rewarding of compliant behaviours (e.g., whistle-blower bonuses and premiums) but also an adequate system of remuneration. Negative financial incentives (3.1.2) concern increasing the cost associated with non-compliant behaviours (e.g., fines or other financial penalties). 3.2. Procedural financial implementation tools are “used to attempt to alter or control aspects of the interest articulation and aggregation systems in contemporary states by creating or encouraging the formation of associations and groups where this activity might not otherwise occur, or by rewarding government friends and pushing enemies through various kinds of payment schemes and penalties” (Howlett 2010: 107). These instruments are rarely used as anti-corruption policy strategies. With regard to anti-corruption, governments could create systems of associational rights for companies that avoid entering particularly corrupt business areas, and financially support them in the organisation of events and in the creation and maintenance of the group. Or, more indirectly, governments could fund scientific research into anti-corruption. 4.1. Substantive government communication tools “rely on the use of information to directly or indirectly affect the behaviour of those involved in the production, consumption and distribution of different kind of goods and services in the society” (Howlett 2010: 116). Two main categories can be distinguished: information dissemination tools (4.1.1) take advantage of persuasion and moral suasion schemes to convey specific messages and change behaviours (e.g., information campaigns to raise awareness among citizens on corrupt behaviours). Information and knowledge collection tools (4.1.2) aim to collect evidence and data to understand the characteristics of a given phenomenon and better inform policies. This information can be derived from official data collected by national statistical agencies, or by developing ad hoc surveys and polling in order to investigate specific issues among the population but also to determine public opinion and agency performance. Specific data can also be collected through judicial inquiries and executive commissions (Howlett 2010: 118−19). 4.2. Procedural information instruments aim to alter the behaviour of policy network members either by releasing or withholding information. Information release tools (4.2.1) facilitate the direct disclosure of information (e.g., through freedom of information and privacy laws) or through consultative tools (e.g., public hearings and public disclosure of government intentions). Information release prevention tools (4.2.2) aim to protect specific types of information and government activities and are usually enforced through censorships, official secrets acts or private acts. Information prevention could support anti-corruption efforts by e.g., guaranteeing the anonymity of those reporting undue behaviour (whistle-blowers).

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Typologies of anti-corruption frameworks  37 The review of toolkits, guidelines and manuals developed by relevant supra-national donor agencies and non-governmental organisations revealed that half of the identified anti-corruption policies are based on information-based implementation tools. Indeed, they are relatively simple to implement, and their development involves fewer resources than other more complex types of policy. Furthermore, technological developments have broadened the range and types of information-based tools. Open data platforms are just one example of how new technologies can be used to empower citizens towards the promotion of transparency and anti-corruption. The second most frequent type of anti-corruption policy involves substantive organisational implementation tools. Almost one third of the identified policies concerns the direct use of government agencies and mechanisms for policy purpose (e.g., e-governance, compliance offices, risk analysis and due diligence systems, auditing systems and selection of personnel). Institutional change, such as the implementation of anti-corruption training to civil servants, better selection of personnel, etc., as well as the creation of new institutions are also frequently applied. Mechanism of Prevention/Intervention The type of policy tool is also determined by the objective of the policy. Most broadly there are two objectives of anti-corruption policies: prevention and intervention. Conventionally, anti-corruption efforts focused on intervention or sanctioning, addressing corruption after it occurred. Recent years have seen a shift towards corruption prevention, seeking to minimise the occurrence of corruption through a variety of strategies. Intervention strategies mainly involve changing risks and rewards, which means maximising the risk for public officials to engage in corruption and minimising the rewards. Examples of policies applying this mechanism are auditing systems; the four-eyes principle; adequate remuneration and pay scales; reporting by public officials of acts of corruption; disciplinary measures and financial sanctions; etc. Prevention strategies can take a variety of forms. Changing the effort refers to those policies which increase the effort for engaging in corruption (e.g., monitoring and oversight; disclosure systems; the timely reporting on revenue and expenditure; e-governance mechanisms; etc.), or decrease the effort to detect and prevent corruption (Graycar and Masters 2018). Raising awareness informs policies which increases public awareness and education on corruption; promote public hearing with government officials; implement codes of conduct for public officials; raise public awareness on anti-corruption bodies; support the freedom to seek, receive, publish and disseminate information concerning corruption and its restrictions; promote the participation of society in the prevention of corruption; etc. (Graycar and Masters 2018). Changing incentives concerns the use of “incentives or disincentives to act with or without integrity” (Graycar and Masters 2018: 174). Policies exploiting this mechanism to prevent corruption are promoting the contribution of the public to decision-making oversight processes; training in ethics; protection of reporting persons; etc. Policies aiming to prevent corruption usually concern substantive organisational instruments (with direct use of government agencies and mechanisms), procedural organisational tools, financial implementation tools and information dissemination policies. If the function of the policy is to detect corruption, substantive organisational tools (with use of indirect government organisations) and information and knowledge collection tools are the most suit-

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38  Handbook on corruption, ethics and integrity in public administration able. When the policy aims at repressing/eliminating corruption, authoritative implementation tools are advocated. Furthermore, the function of the policy and the type of policy tool help determine the type of implementing body and target population of the policy that should be addressed. Organisational, authoritative and financial implementation tools are mainly linked to top-down processes because they are initiated and implemented by governmental agencies or other formal actors (e.g., business managers), through administrative transmission channels (Lange 2008). Information-based tools are more linked to bottom-up mechanisms because they exploit informal social/cultural transmission channels (Lange 2008) and are implemented by actors outside formal institutions (e.g., individuals, civil society members, etc.) (Jancsics 2019). The majority of the identified anti-corruption policies are based on the first mechanism (e.g., monitoring and oversight and e-governance mechanisms), and second mechanism (e.g., adequate remuneration and pay scales, disciplinary measures and financial sanctions), while changing incentives is the least addressed (e.g., training in ethics). This could be due, in part, to the more long-term nature of the task. Nature of Administrative Corruption and Type of Gain Involved in the Corruption Transaction The choice of policy tools should take into consideration the nature of administrative corruption and its dynamics. Corruption might be classified according to the type of gain involved in the corrupt transaction as well as the principal’s or agent’s motivation for participating in this transaction. In relation to bribery and corruption, undue advantages and gains can be pecuniary or non-pecuniary, tangible or intangible (UNODC, 2006: 3; OECD, 2007: 34). Pecuniary gains are monetary gains, either cash or non-cash “payments”. Non-pecuniary gains are all those advantages not involving direct exchange of money. Examples of tangible gains/advantages are money, food and drinks, and sex. Examples of intangible gains/advantages are a loan, favours, influence and relationships. Favouritism (involving intangible gains) is the least addressed by existing anti-corruption best practices at international level. Bribery (entailing tangible gain) is the most targeted. This might be due to the fact that bribery often involves the practical exchange of money and gifts and such concrete gains can be more easily detected and prevented than the mere exchange of favours. Furthermore, existing anti-corruption efforts have been mainly tailored to developing countries, where types of corruption entailing tangible gains are more frequent than in developed countries. This reinforces the need to understand and address the features of corruption in prosperous and developed contexts (Graycar and Monaghan 2015). As far as different policy tools can be used to address different types of corruption, the analysis found the dimension related to the type of gain to be the most valuable in obtaining a parsimonious version of the typology (see Table 3.1). International anti-corruption efforts show a clear difference in the number of policies targeting types of corruption with tangible and intangible gains. Types of corruption entailing intangible gains should be mainly targeted by organisational implementation tools or information-based policies. Types of corruption involving tangible gains, such as illicit enrichment and embezzlement, should be mainly dealt with by authoritative implementation tools. With regard to the motivation for engaging in corrupt practices, we can distinguish between collusive and extortionary corruption (Ryvkin et al. 2017), elsewhere labelled as “greed”

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Typologies of anti-corruption frameworks  39 versus “need” (Bauhr 2017; Jancsics 2019). Extortionary or coercive corruption concerns situations when citizens have to pay bribes for services they are entitled to receive (e.g., obtaining a driver’s licence or a birth certificate, registering a property purchase, etc.) (Ryvkin et al. 2017). In these cases, the principal engages in the illegal act because of a specific need, because corruption is “the only way to receive services or avoid abuses” (Jancsics 2019: 7). It has been demonstrated that “procedural organisational implementation instruments” and “information release prevention tools” involving external bottom-up monitoring, external whistleblowing and generally speaking all policies entailing some sort of citizens’ engagement, are effective in challenging this type of corruption (Jeffreys 2010; Apaza and Chang 2011; Ryvkin and Serra 2016; Bauhr 2017; Björkman et al. 2017; Jancsics 2019). The principal is somehow forced to participate in the illegal transaction but he or she would avoid it if there was an alternative option. Similarly, introducing competition among public officials by allowing citizens to access the service they need from any of the available offices can reduce extortionary corruption (Ryvkin and Serra 2016). Finally, collusive corruption entails “greed mechanisms” and occurs when a bribe is exchanged for the provision of a specific illegal advantage (good or service) and both parties are eager to participate (e.g., the provision of a building permit to an unqualified firm) (Ryvkin et al. 2017; Jancsics 2019). The use of indirect government organisations and external top-down strategies addressed to the agent, such as intelligence practices and disciplinary measures, are effective in this case because they increase the cost of participating in the corrupt transaction (Zamboni and Litschig 2018; Jancsics 2019). Several studies analysed also the effects of leniency (or asymmetric liability) on collusive corruption; however, their results are contradictory (Bigoni et al. 2015; Engel et al. 2016; Abbink and Wu 2017; Christofl et al. 2017; Buckenmaier et al. 2018). This type of policy provides legal immunity to either the agent or the principal in exchange for reporting the illegal transaction. The decrease in collusive corruption is mainly driven by the fear of being betrayed and reported (Mugellini et al. 2019). However, this mechanism works only when the social ties between the parties are weak (Jancsics 2019).

CONCLUSION The analysis of existing international frameworks for anti-corruption illustrates that the scope of available policy options has not been fully addressed. While potentially highly relevant, several types of policy tools do not yet have a concrete equivalent in anti-corruption policy (e.g., market creation and maintenance; see Table 3.1). Practitioners might use the insights from this chapter to develop novel ways of countering corruption. Scholars can primarily benefit by thinking about anti-corruption efforts outside of disciplinary silos and by identifying and tackling blind spots. Beyond its analytical insights, the typology can also serve as a practical tool for developing and evaluating anti-corruption efforts. It allows practitioners to strategise their policy around the corruption problem to be addressed (notably tangible or intangible gains) or to evaluate the appropriateness of a chosen strategy against several core factors (e.g., the function or requirements of a specific policy). More generally, practitioners will find that the typology provides a comprehensive overview of the most pertinent anti-corruption approaches and a straightforward method for distinguishing between them.

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40  Handbook on corruption, ethics and integrity in public administration The categories of the proposed typology are exhaustive in coverage of policy tools and types of corruption but they are not mutually exclusive. This stems from the complexity of corruption as a phenomenon. Perhaps the consequence is that this complexity is insufficiently considered in existing anti-corruption tools. What might represent a weakness for academic purposes can serve as a valuable asset for practitioners, since the typology allows them to identify inconsistencies even within approaches that are policy standards. Considering the frequent failure of anti-corruption initiatives (Persson et al. 2013), the typology might assist in critically evaluating persistent assumptions and one-size-fits-all approaches proposed for a complex social problem.

NOTES This chapter builds upon an initial contribution published by the authors in the European Journal on Criminal Policy and Research: Villeneuve et al. 2019. 2. The term typology refers to multidimensional conceptual classifications (Bailey 1994). 3. In addition to public institutions, administrative corruption can also involve quasi-private organisations that have a strong link to the public sector, either because their mandate is dictated by the state or because the state is the main shareholder. However, such public−private arrangements are excluded, since they evoke types of corruption and require response mechanisms which are closer to those for private-sector corruption (e.g., corruption in the private sector depends on the business environment). 4. A total of 35 types of anti-corruption policies have been identified by reviewing the following publications: Independent Commission Against Corruption (European Union); ICAC (2009), Public Sector Anti-Corruption Framework Manual. European Union Decentralised Cooperation Programme; OECD (2003), Anti-Corruption Instruments and the OECD Guidelines for Multinational Enterprises; OECD (2010), Good Practice Guidance on Internal Controls, Ethics and Compliance; OECD (2009), Recommendation for Further Combating Bribery of Foreign Public Officials; OECD (2016), Recommendation of the Council for Development Co-operation Actors on Managing the Risk of Corruption; Transparency International (2002), Corruption Fighters Toolkit: Civil Society Experiences and Emerging Strategies; Transparency International (2013), Best Practices for Anti-Corruption Commissions; Transparency International (2015), Together Against Corruption: Transparency International Strategy 2020; UNODC (2003), UN Guide for Anti-Corruption Policies; UNODC (2004), The Global Programme Against Corruption UN Anti-Corruption Toolkit; UNODC (2009), Technical Guide to the United Nations Convention Against Corruption; UNODC (2015), National Anti-Corruption Strategies: A Practical Guide for Development and Implementation; UNDP (2011), Practitioners’ Guide: Capacity Assessment of Anti-Corruption Agencies; UNDP (2014), Global Anti-Corruption Initiative (GAIN) Highlights of the Key Achievements in 2014 (2014); UNDP (2015), User’s Guide to Measuring Corruption and Anti-Corruption; UNDP (2017) Global Anti-Corruption Initiative (GAIN) 2014–2017; World Bank (2006), Governance and Anti-Corruption: Ways to Enhance the World Bank’s Impact. 1.

REFERENCES Abbink, K. and K. Wu (2017), ‘Reward self-reporting to deter corruption: an experiment on mitigating collusive bribery’, Journal of Economic Behavior and Organization, 133, 256−72. Amundsen, I. (1997), Political Corruption: An Introduction to the Issues, Bergen: Chr. Michelsen Institute. Apaza, C. R. and Y. Chang (2011), ‘What makes whistleblowing effective: whistleblowing in Peru and South Korea’, Public Integrity, 13 (2), 113–29.

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Typologies of anti-corruption frameworks  41 Bailey, K. D. (1994), Typologies and Taxonomies: An Introduction to Classification Techniques, Thousand Oaks, CA: Sage. Bauhr, M. (2017), ‘Need or greed? Conditions for collective action against corruption’, Governance, 30 (4), 561–81. Beeri, I. and D. Navot (2013), ‘Local political corruption: potential structural malfunctions at the central– local, local–local and intra-local levels’, Public Management Review, 15 (5), 712–39. Bigoni, M., S. O. Fridolfsson, C. Le Coq and G. Spagnolo (2015), ‘Trust, leniency, and deterrence’, Journal of Law, Economics, and Organization, 31 (4), 663−89. Björkman, N., M. D. de Walque and J. Svensson (2017), ‘Experimental evidence on the long-run impact of community-based monitoring’, American Economic Journal: Applied Economics, 9 (1), 33−69. Blind, P. K. (2011), ‘Perspective of corruption metrics’. Paper prepared for the Workshop on Engaging Citizens to Counter Corruption for Better Public Service Delivery and Achievement of the Millennium Development Goals, 4th Session of the Conference of the State Parties to the United Nations Convention against Corruption, Morocco, 26−27 October. Brunetti, A. and B. Weder (2003), ‘A free press is bad news for corruption’, Journal of Public Economics, 87 (7–8), 1801–24. Buckenmaier, J., E. Dimant and L. Mittone (2018), ‘Effects of institutional history and leniency on collusive corruption and tax evasion’, Journal of Economic Behavior and Organization, 1–18. Bussell, J. (2015), ‘Typologies of corruption: a pragmatic approach’, in Susan Rose-Ackerman and Paul Lagunes (eds), Greed, Corruption, and the Modern State, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, pp. 21−45. Christofl, A., U. Leopold-Wildburger and A. Rasmußen (2017), ‘An experimental study on bribes, detection probability and principal witness policy’, Journal of Business Economics, 87 (8), 1067−81. Dish, A., E. Vigeland, G. Sundet and S. Gibson (2009), ‘Anti-corruption approaches. A literature review. Joint evaluation 2009:1’, accessed 13 June 2017 at https://​norad​.no/​en/​toolspublications/​publications/​ 2009/​anti​-corruption​-approaches​-a​-literature​-review/​ Engel, C., S. J. Goerg and G. Yu (2016), ‘Symmetric vs. asymmetric punishment regimes for collusive bribery’, American Law and Economics Review, 18 (2), 506−56. Esadze, L. (2013), ‘Glossary of the conflict of interest and corruption terms’, accessed 11 July 2017 at www​.infoevropa​.rs/​wpcontent/​uploads/​2013/​11/​Londa​-Esadze​-Glossary​-of​-the​-Conflict​-of​-Interest​ -and​-Corruption​-Terms​.pdf Gould, D. J. (1991), ‘Administrative corruption: incidence, causes, and remedial strategies’, in Ali Farazmand (ed.), Handbook of Comparative and Development Public Administration, New York: Dekker, pp. 467−80. Graycar, A. (2015), ‘Corruption: classification and analysis’, Policy and Society, 34, 87–96. Graycar, A. and A. B. Masters (2018), ‘Preventing malfeasance in low corruption environments’, Journal of Financial Crime, 25 (1), 170−86. Graycar, A. and O. Monaghan (2015), ‘Rich country corruption’, International Journal of Public Administration, 38 (8), 586–95, https://​doi​.org/​10​.1080/​01900692​.2014​.949757 Gupta, A. (2017), ‘Changing forms of corruption in India’, Modern Asian Studies, 51 (6), 1862–90. Holmes, L. (2015), Corruption: A Very Short Introduction, Oxford: Oxford University Press. Howlett, M. (2010), Designing Public Policies: Principles and Instruments, London: Routledge. Howlett, M. (2011), ‘Revisiting policy design: the rise and fall (and rebirth?) of policy design studies’. Paper prepared for the General Conference of the European Consortium for Political Research. Section 63. Executive Politics and Governance in an Age of Multi-Level Governance. Panel 52: Policy Instruments: Choices and Design. Panel Session 7, 26 August, 1500−640. Huberts, L. W. J. C. (1998), ‘What can be done against public corruption and fraud: expert views on strategies to protect public integrity’, Crime, Law and Social Change, 29, 209−24. Jancsics, D. (2019), ‘Corruption as resource transfer: an interdisciplinary synthesis’, Public Administration Review, doi:​10​.1111/​puar​.13024 Jeffreys, E. (2010), ‘Exposing police corruption and malfeasance: China’s virgin prostitute cases’, China Journal, 63, 127–49. Lambsdorff, J. G. (2009), ‘The organisation of anticorruption: getting incentives right’, in Robert I. Rotberg (ed.), Corruption, Global Security, and World Order, Washington, DC: Brookings Institution Press.

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42  Handbook on corruption, ethics and integrity in public administration Lange, D. (2008), ‘A multidimensional conceptualization of organizational corruption control’, Academy of Management Review, 33 (3), 710−29. McCusker, R. (2006), ‘Review of anti-corruption strategies: Technical and background paper, 23’, Australian Institute of Criminology, Canberra, Australia and Transparency International/United Nations Human Settlements Programme 2004. Nairobi: OECD Publishing. Morris, S. D. (2011), ‘Forms of corruption’, CESifo DICE Report, 9 (2), 10–14. Mugellini, G., S. Della Bella, M. Colagrossi and G. Killias (2019), ‘Administrative reforms in the public sector and their impact on the level of corruption: a systematic review’, The Campbell Collaboration (final report under evaluation). OECD (2007), Corruption: A Glossary of International and Criminal Standards, Paris: OECD. OECD (2015), Consequences of Corruption at the Sector Level and Implications for Economic Growth and Development, Abingdon: OECD Publishing, https://​doi​.org/​10​.1787/​9789264230781​-en Persson, A., B. Rothstein and J. Teorell (2013), ‘Why anticorruption reforms fail: systemic corruption as a collective action problem’, Governance, 26 (3), 449−71. Rose-Ackerman, S. (1999), Corruption and Government: Causes, Consequences and Reform, New York: Cambridge University Press. Ryvkin, D. and D. Serra (2016), ‘The industrial organization of corruption: monopoly, competition and collusion’, accessed 20 March 2020 at https://​papers​.ssrn​.com/​sol3/​papers​.cfm​?abstract​_id​=​2852523 Ryvkin, D., D. Serra and J. Tremewan (2017), ‘I paid a bribe: an experiment on information sharing and extortionary corruption’, European Economic Review, 94, 1−22. United Nations Office on Drugs and Crime (UNODC) (2004), United Nations Convention Against Corruption, Vienna, accessed 20 March 2020 at www​ .unodc​ .org/​ documents/​ treaties/​ UNCAC/​ Publications/​Convention/​08​-50026​_E​.pdf United Nations Office on Drugs and Crime (UNODC) (2006), Legislative Guide for the Implementation of the United Nations Convention against Corruption. Villeneuve, J. P., G. Mugellini and M. Heide (2019), ‘International anti-corruption initiatives: a classification of policy interventions’, European Journal on Criminal Policy and Research, https://​doi​.org/​ 10​.1007/​s10610​-019​-09410​-w Zamboni, Y. and S. Litschig (2018), ‘Audit risk and rent extraction: evidence from a randomized evaluation in Brazil’, Journal of Development Economics, 134, 133−49. Zhang, Y. and J. G. Vargas-Hernández (2017), ‘Introduction: corruption and government anti-corruption strategies’, in Y. Zhang and C. Lavena (eds), Government Anti-Corruption Strategies: A Cross-Cultural Perspective, New York: Routledge.

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4. Virtue and morality in public administration: values-driven leadership in public-sector agencies Michael Macaulay

INTRODUCTION: THE CONTESTED VALUES OF CORRUPTION In 2014, the then prime minister David Cameron hosted the United Kingdom (UK) government’s first international anti-corruption strategy. It was the culmination of many other streams of work. Under Cameron, the Serious Organised Crime Agency had been reconfigured as the National Crime Agency. The UK’s first ever national anti-corruption strategy had been published; and now, the conference would host dignitaries from around the world in order to showcase the leadership role that the UK was playing in the fight against global corruption. It hadn’t always been like this. Only three years previously Cameron had rejected the findings from Transparency International UK’s study in corruption within his own jurisdiction. His subsequent championing of anti-corruption work, then, came as something of a surprise to some, albeit one that was warmly welcomed as a progressive and constructive one. Unfortunately, the conference itself is mainly remembered for one of Cameron’s most infamous gaffes. A conversation that he was having with Queen Elizabeth II and others was caught on camera, and subsequently broadcast, with him explaining that ‘we have some fantastically corrupt countries here’ before declaring that ‘We’ve got Afghanistan and Nigeria, possibly the two most corrupt countries in the world.’ Nobody interjected.1 The implication was obvious. Corruption was something that happened elsewhere, in economically poorer nations, and was not a UK problem. Cameron’s argument was, very clearly, steeped in a number of value-laden assumptions, which often permeate into discussions on corruption. Johnston’s (2005) Syndromes of Corruption posits that all jurisdictions experience corrupt behaviour but that some enable and industrialise it as influence marketing (see also Gluck and Macaulay, 2017). Others argue that attacks on public values, which can be within legal norms, are themselves a form of ‘deep corruption’ (Bozeman et al., 2018) while O’Connor and Fischer (2012) argue that trying to impose the societal values of low-corruption countries onto high-corruption countries is an ineffective driver of change. A number of different authors (e.g. Gregory, 2011) point out the inherent value bias in many of the most commonly used anti-corruption and good governance measures. All of which point to challenges towards a values-driven leadership approach. Interestingly these challenges are not unlike ones that have been discussed in other, non-corruption contexts. Cameron’s remarks clearly point to an ‘othering’ approach to supposedly corrupt nations (it happens there but not here), and the creation of us and them dichotomies goes back to the most classic of work on public values. The distinction between public-sector and private-sector values was being outlined over 40 years ago (Murray, 1975). It is a distinction that has never 43 Michael Macaulay - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:20PM via The University of British Columbia Library

44  Handbook on corruption, ethics and integrity in public administration really gone away, albeit one we now see more as a continuum than in opposition, with more likelihood of value congruence across sectors than originally envisaged (see, for example, Lyons et al., 2006; van der Wal et al., 2008; van der Wal and Huberts, 2008). More recently, scholars such as Beck Jørgensen and Rutgers (2015) have offered a distinct ‘public values perspective’ that spans a number of these questions, and several others. In their view, the public values perspective: ‘Concerns not a singular approach or conceptualisation, but a diversity of approaches that are characterized by taking as their starting point the intrinsically normative nature of public administration and the attempt to bridge theoretical and empirical perspectives on this issue’ (2015: 4). What is interesting with this perspective is just how open-ended it is, allowing a multiplicity of views to be negotiated simultaneously. Let’s turn to the nature of what a public value may be, and how they are frequently defined and ascribed.

VALUES-BASED LEADERSHIP Values-based (values-driven) leadership has become such a commonly accepted idea that there is a specific academic journal dedicated to promulgating its message. The idea is inextricably linked with ideas on ethical leadership (Lawton and Macaulay, 2009) and the behaviours that spring from embodying positive values, which can be spread not only by individual leaders but by organisations themselves. The importance of role modelling good behaviours, setting expectations, etc. are all well attested (see, for example, Brown et al., 2019) and all seem to rest on a bedrock of values. But what is a value? For the purposes of this discussion we need to draw a very sharp distinction between public values and public value. Although there are obvious links between the two, public value is associated with the concept created by Mark Moore (1995) and subsequently used as a strategic framework for public management (see, for example, Alford and O’Flynn, 2009). Public values are the more general qualities that guide behaviour. All values have some degree of inherent subjectivity. As Bozeman (2007) argues, any value rests on a number of assumptions: (1) that it offers an evaluative judgement; (2) that it reflects both cognitive and affective elements; (3) it is comparatively undynamic and fixed over a long period of time; (4) it affects behaviour of both self and others; (5) conscious deliberation is key to value changes; and (6) values are intrinsically linked to self and group identity. This is the strong appeal of organisational values, of course: that they underpin and set the tone for behaviour and standards within an agency; and drive the performance of people within an organisation. Difficulties arise, however, in the details of values-based approaches. Both the nebulous nature of public values perspective, and the inherent subjectivity of Bozeman’s perspective, do not necessarily lend themselves to easy implementation. Indeed, they only raise a number of questions, including: ●● ●● ●● ●● ●●

What values are to be driven? What is the best way to operationalise such values? Who selects and defines them (and by what process)? How do we know when they have been met? What do we do if they are not met?

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Virtue and morality in public administration  45 Table 4.1

Purpose, principles and values of the New Zealand public sector

Purpose Delivering results and services for citizens Serving the government of the day and successive governments effectively and efficiently Supporting continuity of democratic government Principles

Values

Political neutrality

Impartial

Free and frank advice

Accountable

Merit selection

Behave with integrity

Openness

Respectful

Stewardship

Committed to service

There is no shortage of works that attempt to answer the first of these questions, and there are myriad typologies available. To offer just a few examples: Molina and McKeown (2012) list no less than 30 public administration values; Kernaghan (2003) outlined 32 different public values, grouped into four specific types: ethical; democratic; professional; and people. Van Wart (1998) crafted public values into five specific ‘clusters’, whereas in his classic 1991 treatise on New Public Management, Hood outlined three distinct groupings for public values. Such typologies are reflected in practice. In the mid-1990s, the UK’s first incarnation of the Committee on Standards in Public Life created the seven principles of public life (selflessness, integrity, objectivity, accountability, openness, honesty and leadership) that still form the bedrock for values across the public sector, both central and local. The New Zealand public service has four key values (fair, impartial, responsible, trustworthy) upon which nearly 20 different subvalues flow out. New Zealand’s new Public Service Act, which is due to become law in 2020, seeks to promote a newly configured ‘spirit of service’ across the New Zealand public service to act as a unifying value (Hughes, 2018; Scott and Macaulay, 2020). Within the act there is a new set of values, which are a subdivision of the purpose, principles and values of the New Zealand public sector (see Table 4.1). The distinction between principles and values is not entirely clear, and the development of these values will be discussed in more detail later in the chapter. Identifying values, therefore, is not a very difficult task but what is problematic is the means by which these selections are made (Fukumoto and Bozeman, 2019). The other key questions, however, are even more complex. As scholars have pointed out, for example, there have been conspicuously few attempts to measure the robustness or adherence to organisational values (e.g. de Graaf et al., 2016). Perhaps more important is the question on who selects values to begin with. Taking into account Bozeman’s perspective on the emotional resonance of values, and their connectivity to identity, the shared construction of values is arguably crucial.

FROM VALUES TO VIRTUES IN CLASSICAL THINKING The connection between values and virtues is intuitively obvious. If values are ‘a quality or standard that guides behaviour and decision making’ (van der Wal, 2017: 31) then virtues are connected with our moral choices: ‘Virtues are character traits which we need to live humanly flourishingly lives’ (Oakley and Cocking, 2001: 18). Yet although virtue is embedded in morality, it also arguably takes on similarities of competences: clusters of learned skills,

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46  Handbook on corruption, ethics and integrity in public administration knowledge and technical efficiency. Virtues and competence both share a ‘fundamental principle of demonstrating capability’ (Naquin and Holton, 2003: 25) that is sometimes codified as seeking to do well while doing good. Macaulay and Lawton (2006) explored the links between virtues and competencies, and argued that the two concepts are closely intertwined: competencies embody certain virtues, whereas virtues require competence in order to successfully implement them through virtuous actions. Indeed, this convergence is increasingly reflected in modern literature, although it can actually be traced back several centuries. As far back as Aristotle the role of virtue has been to connect the twin worlds of the moral and political life through the pursuit of the good. Predating ideas around competences by some considerable margin, Aristotle (1947: 1103a, 1–10) defines virtue as an excellence (arête) that can be divided into two types – intellectual and moral – reflecting man’s (and unfortunately in this case, man was used gender-specifically) dual capacity for reason and ability expressing his judgements through language. But virtue cannot be understood unless by means of the telos: the end to which all forms of life must attain. Man’s telos (again in the gendered sense) was eudaimonia, the good life. Over the years, the term eudemonia has been translated in different ways, either as ‘happiness’, ‘bliss’ or even simply as ‘well-being’. The concept relates to Aristotle’s teleological belief that something can only be understood and fulfilled once it has reached its natural end. The good life can thus be recognised, understood and, most importantly, attained. Virtue theory necessarily prioritises the good over the right, a distinction that remains crucial to virtue ethics today (Mangini, 2000; Oakley and Cocking, 2001). From its earliest inception (in the west at least), virtue has been inextricably linked with notions of the good life: public virtues, therefore, are the means by which the public good can be enacted. Once the proper telos was understood Aristotle identified the relevant virtues that enabled man to meet it: courage, temperance, pride, good temper, friendliness and truthfulness. All of these could be developed and cultivated in man by habitually practising virtuous actions. The virtue of phronesis – practical wisdom – was especially important as it enabled many to have genuinely political thought and also allowed him to evaluate the nature of other virtues: ‘Political wisdom and practical wisdom are the same state of mind, but their essence is not the same’ (1947: 1141b, 25–30). Not only is virtue necessary for good governance, but it is also political in a broader sense, as it cannot be cultivated or practised outside of the polis. Man can only achieve eudemonia inside the polis because it is only this particular form of association that facilitates the development of his human self. It is crucial here to remember that Aristotle is referring specifically to male citizens: one of the reasons the polis is so important is that it has the requisite social structure (with subordinate roles for women and, of course, slaves) to allow man the time to practise virtuous actions. It is the self-sufficiency of the polis that allows moral and intellectual development to take place (1988, 1326b: 30). In this sense, all virtues are intimately connected to both public and political life. In the Aristotelean sense, then, virtues are far more than values. They are the means to the end of achieving the good life: the characteristics that enable man to live his telos. They are also intrinsically political, because the good life for man cannot be outside the political realm. They encompass a variety of skills and, crucially, the skill of judgement. In other words, Aristotelean virtues are not far removed at all from the competences associated with public leadership.

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Virtue and morality in public administration  47 A second classical concept of virtue is even more explicit about its association with skills and competences. Machiavelli’s The Prince (Machiavelli 1994) outlines a very specific form of virtue that is also linked with political life but has traditionally been seen as the antithesis of the theory of the good. Its notoriety was gained in no small measure, however, precisely because Machiavelli’s concept of virtù was equated with traditional ideas of Christian virtue. Machiavelli’s reputation does not square with the historical figure that we know he was. As Macaulay and Lawton (2006) show, he was a committed public servant, and a republican, who constantly stressed the need to maintain the common good. Even his praise for historically cruel figures such as Cesare Borgia was based on the perception that malicious acts ultimately served the public good. Whereas this view is frequently deemed to be that the means justify the ends, it is often forgotten that it was the ends that Machiavelli was primarily conceived with. Although his work was not teleological in the same sense as Aristotle’s, he was nevertheless focussed first and foremost on public outcomes. The notion of virtù itself was outlined as a broad set of leadership skills (e.g. military prowess, diplomatic sensitivity, an understanding of one’s subjects’ character, etc.). They are the skills of the virtuoso rather than the virtuous (Macaulay and Lawton, 2006). Virtù was easily demonstrable and had clearly defined results. Whatever the particular public good may be, Machiavelli’s virtù points towards the ways to achieve it. For both classical conceptions of virtue, therefore, we see distinct similarities. A priority of the public good; an equation of virtue (or virtù) with skill and competence; and an ability to connect them as means and ends.

VIRTUE AS ETHICAL COMPETENCE Liberal traditions prioritise the right over the good: individuals have the right to choose whichever good life suits them best and both politics and public administration should be designed to enable that right to be exercised as freely as possible. This prioritisation has seen the end of teleological assumptions about the natural ends of human beings, and with it a decline in the notion of virtue as a means of achieving the good life. A more explicit attack within modern virtue theory is on managerialism – whether private or public – and arguably against the notion of administration itself. MacIntyre (1985) criticised bureaucratic managers, which he perceived as prioritising means over ends, simply concerning themselves with efficiency and effectiveness rather than a more tangible public good. For MacIntyre, managers are ‘seen by themselves, and by those who see them with the same eyes as their own, as uncontested figures, who purport to restrict themselves to the realms in which rational agreement is possible – that is, of course, from their point of view to the realm of fact, the realm of means, the realm of measurable effectiveness’ (1985: 30). MacIntyre links this critique with the concept of managerial knowledge, and in particular its reliance on social science tools and techniques, although the social sciences are characterised by ‘the absence of the discovery of any law-like generalisations whatsoever’ (MacIntyre, 1985: 88). The bureaucratic manager is thus a rather impotent figure, influencing their agencies despite rather than because of their managerial expertise. In this sense, bureaucrats simply cannot be virtuous. MacIntyre’s perspective on the managerial character has been criticised for presenting a caricature of the bureaucratic manager (Nash, 1995) whose assumptions are overturned by

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48  Handbook on corruption, ethics and integrity in public administration a number of perspectives. Evidence on the importance of ethical leadership makes a mockery of the characterisation of management behaviours as fundamentally amoral. Outcomes-based approaches to strategy, including Moore’s conception of public value, show clearly that few public managers prioritise means over ends. Many different theoretical frameworks emphasise the importance of moral aspects of public management. Public service motivation, for example, details the moral values that public servants hold dear, and display in their work. Bowman et al. (2004) outlined ethical competencies as one of three essential elements of the ‘skills triangle’, alongside technical and leadership competencies: these include moral reasoning, values management and prudent decision making (Bowman et al., 2004: 21). Virtanen (2000) also included ethical competence as one of his five key competencies for public managers. Indeed it is the competence that unites and gives sense to all others: ‘[W]ithout ethical competence, public managers do not use their political, professional, or task competence in right ways’ (Virtanen: 2000, 336). Others have been more explicit in their attempt to define a new public virtue ethics. Cooper (1987), for example, expands on MacIntyre’s to posit a model of administrative practice. Cooper identifies three realms of practice – public interest, process and procedures, and loyalty to colleagues – and lists their attendant internal goods. He then establishes the relevant virtues that ‘must be consistent with agreed upon internal goods of the practice of public administration’ (323). The problem here is that, as with any theory of the good, there will always be the potential to criticise particular choices as somewhat arbitrary. Macaulay and Lawton (2006) show that standards of conduct in UK local government were identified by ethics officers as being closely associated with public virtue. Unlike Bowman et al., however, these officers did not distinguish between a range of different types of competence but rather saw all their knowledge/skills/attributes imbued with a moral purpose. Ellström (1997) distinguished competence from qualification, defining it as ‘the potential capacity of an individual (or a collective) to successfully… handle certain situations or complete a certain task or job’ (267). There is little here, arguably, to distinguish competence from either of the classical traditions of virtue that we identified earlier. Putting these ideas together we can see that values drive behaviour and choices; virtues drive moral action. These can be translated into administrative practice through public service motivation and ethical competence, although these are not the only means of putting values and virtues into action. The chapter will now turn to three brief cases that highlight the opportunities and challenges of implementing a values and virtues approach.

CASE 1: VALUES-DRIVEN LEADERSHIP IN NEW ZEALAND POLICE Macaulay and Rowe (2019) offer a recent example of the co-creation of public values within New Zealand Police. As a result of a Commission of Inquiry into police misconduct, New Zealand Police was given a ten-year period (2007–17) to enact 47 different cultural change recommendations (see also Rowe and Macaulay, 2018). Among these was a commitment to foster a new set of police values, which had never previously been codified or articulated by the agency. The values were unveiled in 2015 under the acronym PRIMED: Professionalism, Respect, Integrity, commitment to Māori and the Treaty, Empathy, and valuing Diversity.

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Virtue and morality in public administration  49 Indications are that, thus far, the values are well recognised with a substantial level of adherence (see Rowe and Macaulay, 2018; Macaulay and Rowe, 2019). It is notable that the creation of these values was not a top-down approach. The values themselves, and the meaning behind them, were generated from groups of individuals using a specific story-telling and narrative-building approach. The values were generated throughout a series of workshops, which were deliberately run to build up stories based on real-life experiences. They comprised eight groups, including very senior leaders and other ranks below, in which each participant was asked to recount an incident in their lives which had profoundly affected them, and had taught them the importance of a particular value. These stories were collated and each group then fed back one story to the other groups, all of which were collected and collated to help inform the final values. Participants were encouraged to tell stories about any aspects of their lives, not just their professional careers, and importance was placed on being able to contextualise the value within the narrative. From these workshops and the resulting discussions the PRIMED values were codified. The new police PRIMED values signal a change in perspective from a more traditional view of policing to one that focuses on care and community work. In particular, the values of ‘empathy’ and ‘valuing diversity’ are considered by New Zealand Police to be crucial in creating a mind shift towards victim/centric policing (Macaulay and Rowe, 2019). Perhaps more importantly the co-creation of values has enabled the principles that Bozeman uses to define a value, to be brought to the fore. Although each of the values is open to subjective interpretation, the shared nature of these through the narrative-building workshops enables a common understanding to be developed. Telling stories also develops a strong emotional commitment, that can be transferred onto a broader commitment to the value itself. Perhaps most obviously, the PRIMED values were the result of considered and conscious deliberation, and are seen as the connective tissue towards a new sense of shared cultural identity. The creation of PRIMED values is therefore a useful example of one driver of value-driven cultural change but, simultaneously, indicative of positive processes for values co-creation. Tellingly, the PRIMED values have been embodied in many other areas of the New Zealand Police. Recruitment has shifted towards much greater diversity in terms of both gender and cultural backgrounds, although the extent to which this strategy is embedded is not yet able to be seen. The values-based mind shift towards victim-centric policing is reflected in media campaigns. Social media, print media and television advertising now ask the question ‘do you care enough to be a cop?’ Various scenarios are built around this, including members of the public stepping over homeless people on the street, or helping what appears to be a lost child. Again, the impacts of this campaign are yet to be properly evaluated, but there is no doubt that there is a sincere attempt to embed the values into public consciousness and therefore attract a new more diverse range of recruits. It might be noted that the previous police recruitment campaign used action-orientated imagery, to denote policing as an exciting life of fighting crime. It used the strap line ‘get better work stories’. This is a marked contrast to the new emphasis on care, and there is a clear attempt to show that the police is as much concerned with social care as it is with law enforcement. The PRIMED values have driven other cultural changes as well: new content in training and development, and also new styles of training and development. Victim-led training is one area that seems to embody the value of empathy.

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50  Handbook on corruption, ethics and integrity in public administration It is tempting to hail the development and dissemination of PRIMED values as a complete success but we must be relatively circumspect. The extent to which they will drive long-lasting cultural change remains to be seen. But the use of narrative workshops, the deliberate emphasis on co-creation, the emotional resonance and also the connection with shared identity all point towards a very positive process. If nothing else it demonstrates values-driven leadership as an active rather than reactive (or even passive) experience.

CASE 2: VALUES-DRIVEN LEADERSHIP IN PUBLIC SERVICE As we saw earlier the New Zealand public service is currently looking to develop a new set of public values,2 which is underpinned by a unifying ‘spirit of service’, whose aspirations have been articulated by state services commissioner, Peter Hughes: I really do believe in the ‘spirit of service’ that our New Zealand State Sector Act talks about. While, perhaps it’s an old-fashioned word, I really do believe that it is a noble thing to choose to serve your country and your fellow citizens, as your career. Like all public servants, like many of you in this room, I chose to do that, myself, because I care, and I want to make a difference. We all do. I believe that public service is something that we should acknowledge, celebrate and reward. (Hughes, 2018)

As Scott and Macaulay (2020) show, one of the reasons why the notion of the spirit of service remains relatively broad is that its meaning has been co-created by senior public service leaders. Although there are many antecedents to this, a series of senior leadership retreats between that are still ongoing took a strong lead in fleshing out a shared understanding of public values that is driving legislative change. The retreats began in March 2014, when chief executives of 30 central government departments and those of three of the larger arms-length agencies attended a two-day event in rural New Zealand. During the retreat the participants decided to begin to note down their commitments to public service, and the people of New Zealand. Due to the perceived success of the retreat, it has become a regular event, with leaders meeting four times a year and they appear to have helped foster a sense of shared identity, which permeates the unifying idea of the spirit of service. In 2016 this emerging identity was semi-codified further through the decision to adopt a new name for the group: the State Sector Leadership Team (SSLT). It was further reconfirmed that this group would continue to collaborate and co-create as a unified team to lead across New Zealand’s public service. The initial manifesto was reinforced and reified, evolving into a written ‘team charter’ that further ascribed specific behaviours by which the group would abide. In essence, then, we can see a co-creation of initial values, developing into a more virtue-like approach. And despite the misgivings of authors such as MacIntyre it began with identifying public goods and common ends – with a telos, so to speak. More interestingly still is that this was not the language that was used to explain or make sense of the process – instead it was regarded as an organic process. These various activities have all helped to generate traction on the new Public Service Act and on the emergence of the spirit of service more generally. SSLT has been a values-driven, co-creative process. The retreats have enabled the SSLT to not only create a shared identity but also a sense of shared ownership for public service: including its performance; improving diversity and inclusion; talent management; and the management of data and digital service.

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Virtue and morality in public administration  51 The values and virtues approach has only intensified throughout: once shared outcomes in the above areas were identified, a leader and a working group were tasked with developing ways forward. Only time will tell as to how much further the SSLT will drive public service leadership but all the indications are that it will continue. Since 2017, the retreats have spread to bring in significantly more leaders from various levels of the public service through an annual Public Service Leaders Summit. As Scott and Macaulay (2020) show, SSLT members have also been steadfast that identifying as part of a leadership team has resulted in changed behaviours. Furthermore, the development of a shared identity has crafted a shared language and signifiers, including the name of the group itself. Revisiting the newly minted New Zealand public service values we can clearly see the influence of the SSLT’s leadership, particularly with the value ‘committed to service’, which is essentially a restatement of the central premise that brought the SSLT together. The definition of this value includes a ‘commitment to improvement’, which has also been explicitly articulated throughout the discussions of the SSLT during its retreats. It also contains a pledge to continue to spread the ideas of co-creation and involve greater citizen and community participation; bringing to life the very values that drove the leaders’ own thinking.

CASE 3: FROM VIRTUE TO VICE: A WARNING FROM PRESENT HISTORY Values-driven leadership, and the development of virtues that help attain this, inevitably have a down side. As has been seen the essence of both of these points is that they are subjective, which goes back to initial remarks that we saw with former UK prime minister David Cameron. Few areas reveal the dangers of this subjectivity more than the field of corruption, which is awash with means–ends dilemmas. Although it may seem intuitive that virtue is a means of protecting against corruption (Potter, 2018), leading commentators are more likely to emphasise the grey areas that have encouraged some commentators to discuss the ‘virtues of corruption’ (Moyar, 2015). At the risk of becoming overly political the nexus between values, virtues and corruption is nowhere more evident than this moment in history with the fight against corruption than in the ongoing impeachment of United States (US) president, Donald Trump. This section of the chapter will offer some observations explaining how the current political saga embodies all of the key elements that have already been identified at a theoretical level. The section will not, however, speculate or try and evaluate the proceedings: few things age more quickly than live political commentary. Nonetheless, the impeachment process is illustrative of how virtue is portrayed and understood, and how it is intrinsically linked in with concepts of political virtue and public value. The most obvious way in which this manifests itself is that although the word is rarely used, President Trump has been bombarded with attacks on his character since long before he even announced his nomination. Talk of the sexual predilections against President Trump are even more pronounced with nearly 30 women accusing him of sexual misconduct or inappropriate behaviour; a number so significant that at least one major publication has accused the president of being a sexual predator (Guardian, 2019; see also Levine and El-Faizy, 2019).

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52  Handbook on corruption, ethics and integrity in public administration Attacks on the character of public leaders are nothing new, of course. There is currently a wealth of media criticism of the leaders across the world. The UK prime minister Boris Johnson is frequently chided for his alleged dishonesty, which has been traced back to his old school reports and track record as a journalist, but also questions regarding his personal life. The UK media frequently brings up Boris Johnson’s unwillingness (or inability) to explain how many children he is father to, or who their mothers may be. As Pfiffner (2004) demonstrates, even within a milieu of supposedly positive political campaigning, vast swathes of critique of US presidents have, throughout history, focussed on character. And the opposite is equally true, of course: character is frequently a focus of public, even global, praise. What might be of greater consequence is the continuing personalisation of politics, that has been documented all over the world (Karvonen, 2010; Langer, 2007; Langer and Sagarzazu, 2018). With the advent of new media channels, and increased access to information and/or disinformation, this trend only continues to get stronger. President Trump’s revolutionary use of Twitter, for example, has arguably exacerbated the sense of personal connection that has been fostered with supporters and detractors alike. Critique of character has, inevitably, spilled over into the broader public administration arena. There are too many examples of myriad members of Trump’s staff being excoriated on a deeply personal level: from Saturday Night Live’s initial lampooning of Sean Spicer as a blowhard and a buffoon, through to current chief of staff, Mick Mulvaney, and attacks on his honesty. Perhaps most obviously, President Trump himself regularly besmirches the virtue of public officials who he deems to have crossed his path, even as they are testifying against him during impeachment hearings. Trump’s attacks are live. Focussing on character is, however, a surface-level approach. The nexus of corruption, virtue and values is much deeper in this instance than simply character attacks. The impeachment saga reflects the nature of all the key themes in this chapter. To begin with, it is crucial to note that on either side of the argument is a shared telos – that is public good of combatting corruption. What is open to question is who is striving to attain this end, and who is trying to prevent it. At stake in the impeachment is whether or not Trump tried to influence Ukraine to investigate a potential political rival, Joe Biden, by withholding military aid. Trump and his defenders argue that he was acting to attack corruption. His opponents accuse him of using military aid as a bribe, and that whatever the intention of the action may have been, requesting overseas interference into US elections is itself a corrupting act. From either end of the spectrum, however, the telos is the same. The second interesting point is that the means of achieving that telos can be both lauded or derided depending on how one views the telos that was being aimed for. Trump portrays his actions as morally just: like many authoritarian-leaning leaders he portrays himself as strong, decisive, ready to make tough decisions and even more willing to act outside the rules if necessary. In October 2019, the Trump administration even launched a proto-campaign advertisement outlining these very virtues. Opponents, of course, portray a very different set of virtues: cunning, perhaps, but also bullying, hectoring and ultimately self-serving. Clearly those who are pro-impeachment characterise these virtues very differently. Such a difference in perspective is to be expected, of course, but what the above also highlights is the further distinction between virtú and virtue. Acting outside of agreed rules and norms, for example, may not be seen as being particularly virtuous, but they are well within the skillset that makes up a leader’s virtú.

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Virtue and morality in public administration  53 Key to the whole debate, however, is the defining of democratic and national value. The US constitution, with all its checks and balances, can be seen in one sense as a system for the prevention of means/ends dilemmas. And this is where the battle of values of being fought. The telos of corruption brings into light the powers of the respective branches of government, and the boundaries within which (and between which) they can act.

CONCLUSION This chapter, then, ends much as it began: by using the example of corruption to highlight difficulties surrounding our use of values and virtue. We do not know how history will judge either of the three cases outlined but we can see how they each reflect different components of the discussion here. In so doing it follows the path of other recent scholarship. Fukumoto and Bozeman (2019) point out, for example, that despite many years of very constructive research there are still important questions to be raised around public values: the way in which values are defined; the intentions behind them; and the instruments that are used to enact and implement them. Discussions around virtue will never fade, not only because discussion of character is such an intrinsic feature of public discourse, but because agreement on the telos of the public good is unlikely to be settled. Yet despite their subjective nature neither values or virtues are due to go anywhere any time soon. What the examples of the value-based leadership approach hopefully illustrate is that an understanding of intersubjectivity can bring much needed concord (Macaulay, 2009). The three cases highlight this interplay. Where values-driven leadership is a shared experience, it can lead to the mutual development of values and attendant virtues. In so doing there does not have to be a single, commonly agreed definition, because the co-creation process enables different subjective views to be aired and allows people to move through the spaces in between these viewpoints. It also allows for the virtues of judgement and practical wisdom to be enacted.

NOTES 1. The clip is still publicly available to watch on YouTube. 2. I am indebted to my friend and co-author associate professor Rodney Scott for his work on this section of the chapter.

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54  Handbook on corruption, ethics and integrity in public administration Bowman, James S., West, Jonathan P., Berman, Evan M. and Van Wart, Montgomery (2004) The Professional Edge: Competencies in Public Service. New York: M. E. Sharpe. Bozeman, B. (2007) Public Values and Public Interest. Washington, DC: Georgetown University Press. Bozeman, B., Molina, Jr., A. L. and Kaufmann, W. (2018) ‘Angling for Sharks, Not Pilot Fish: Deep Corruption, Venal Corruption, and Public Values Failure’, Perspectives on Public Management and Governance, 1(1), 5–27. Brown, A. J., Lawrence, S., Olsen, J., Rosemann, L., Hall, K., Tsahuridu, E., Wheeler, C., Macaulay, M., Smith, R. and Brough, P. (2019) Clean as a Whistle: A Five Step Guide to Better Whistleblowing Policy and Practice in Business and Government. Brisbane: Griffith University. Cooper, Terry L. (1987) ‘Hierarchy, Virtue, and the Practice of Public Administration: A Perspective for Normative Ethics’, Public Administration Review, 47(4), 320–8. de Graaf, G., Huberts, L. and Smulders, R. (2016) ‘Coping with Public Value Conflicts’, Administration and Society, 48(9), 1101–27. Ellström, Per Erik (1997) ‘The Many Meanings of Occupational Competence and Qualification’, Journal of European Industrial Training, 21(6), 266–7. Fukumoto, E. and Bozeman, B. (2019) ‘Public Values Theory: What Is Missing?’, American Review of Public Administration, 49(6), 635–48. Gluck, J. and Macaulay, M. (2017) ‘Trading in Influence: A Research Agenda for New Zealand?’, Policy Quarterly, 13(2), 49–55. Gregory, R. (2011) ‘Assessing “Good Governance”, “Scientific” Measurement and Political Discourse’, Policy Quarterly, 10(1), 15–25. Guardian (2019) ‘Trump the Predator’, 19 October. Hood, C. C. (1991) ‘A Public Management for All Seasons?’, Public Administration, 69, 3–19. Hughes, P. (2018) Paterson Oration. Speech delivered on 7 March to the Australia and New Zealand School of Government, Sydney. Transcript accessed on 21 March 2019 at: www​ .ssc​ .govt​ .nz/​ resources/​state​-services​-commissioner​-delivers​-2018​-paterson​-oration/​ Johnston, M. (2005) Syndromes of Corruption: Wealth, Power and Democracy. Cambridge: Cambridge University Press. Karvonen, L. (2010) The Personalisation of Politics: A Study of Parliamentary Democracies. Colchester: ECPR Press. Kernaghan, K. (2003) ‘Integrating Public Values into Public Service: The Values Statement as Centrepiece’, Public Administration Review, 63(6), 711–19. Langer, A. I. (2007) ‘A Historical Exploration of the Personalisation of Politics in the Print Media: The British Prime Ministers (1945–1999)’, Parliamentary Affairs, 60(3), 371–87. Langer, A. I. and Sagarzazu, I. (2018) ‘Bring back the Party: Personalisation, the Media and Coalition Politics’, West European Politics, 41(2), 472–95. Lawton, A. and Macaulay, M. (2009) ‘Ethics Management and Ethical Management’, in Ethics and Integrity in Public Administration: Cases and Concepts, ed. Cox III, R. New York: M. E. Sharpe, pp. 107–20. Levine, B. and El-Faizy, M. (2019) All the President’s Women: Donald Trump and the Making of a Predator. London: Trapeze. Lyons, S., Duxbury, L. E. and Higgins, C. A. (2006) ‘A Comparison of the Values and Commitment of Private Sector, Public Sector, and Parapublic Sector Employees’, Public Administration Review, 66(4), 605–18. Macaulay, M. (2009) ‘The I that Is We: Recognition and Administrative Ethics’, in Ethics and Integrity in Public Administration: Cases and Concepts, ed. Cox III, R. New York: M. E. Sharpe, pp. 26–40. Macaulay, M. and Lawton, A. (2006) ‘From Virtue to Competence: Changing the Principles of Public Service?’, Public Administration Review, 66(5), 1–9. Macaulay, M. and Rowe, M. (2019) ‘Happy Ever After? Using Narrative to Create Change in Police Values’, Public Management Review. Machiavelli, Niccolò (1994) Selected Political Writings. Trans. and ed. Wootton, David. Indianapolis, IN: Hackett. MacIntyre, Alasdair (1985) After Virtue: A Study in Moral Theory. 2nd ed. London: Duckworth. Mangini, Michele (2000) ‘Character and Well-Being: Towards an Ethic of Character’, Philosophy and Social Criticism, 26(2), 79–98.

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Virtue and morality in public administration  55 Molina, A. D. and McKeown, C. L. (2012) ‘The Heart of the Profession: Understanding Public Service Values’, Journal of Public Affairs Education, 18(2), 375–96. Moore, M. H. (1995) Creating Public Value: Strategic Management in Government. Cambridge, MA: Harvard University Press. Moyar, M. (2015) ‘The Virtues of Corruption’, Wall Street Journal, 31 May. Murray, M. A. (1975) ‘Comparing Public and Private Management: An Exploratory Essay’, Public Administration Review, 35(4), 364–71. Naquin, S. and Holton, E. F. (2003) ‘Redefining State Leadership and Management Development: A Process for Competence-Based Development’, Public Personnel Management, 32(1), 23–46. Nash, L. (1995) ‘Whose Character? A Response to Mangham’s “MacIntyre and the Manager”’, Organization, 2(2), 226–32. O’Connor, S. and Fischer, R. (2012) ‘Predicting Societal Corruption across Time: Values, Wealth, or Institutions?’, Journal of Cross-Cultural Psychology, 43(4), 644–59. Oakley, J. and Cocking, D. (2001) Virtue Ethics and Professional Roles. Cambridge: Cambridge University Press. Pfiffner, J. P. (2004). Character Factor: How We Judge America’s Presidents. College Station: Texas A&M University Press. Potter, N. (2018) ‘Logos II – Virtue Ethics and Political Corruption: An Ethical Case Study’, Aristos, 4(1), 1–6. Rowe, M. and Macaulay, M. (2018) ‘Giving Voice to the Victims of Sexual Assault: The Role of Police Leadership in Organisational Change’, Policing: An International Journal, 42(3), 394–407. Scott, R. and Macaulay, M. (2020) ‘Making Sense of New Zealand’s “Spirit of Service”: Social Identity and the Civil Service’, Public Money and Management, https://​doi​.org/​10​.1080/​09540962​.2020​ .1735109 van der Wal, Z. (2017) The 21st Century Public Manager. London: Palgrave. van der Wal, Z. and Huberts, L. (2008) ‘Value Solidity in Government and Business: Results of an Empirical Study on Public and Private Sector Organizational Values’, American Review of Public Administration, 38(3), 264–85. van der Wal, Z., de Graaf, Gjalt and Lasthuizen, Karin (2008) ‘What’s Valued Most? Similarities and Differences between the Organizational Values of the Public and Private Sector’, Public Administration, 86(2), 465–82. Van Wart, M. (1998) Changing Public Sector Values. New York: Garland. Virtanen, Turo (2000) ‘Changing Competencies of Public Managers: Tensions in Public Commitment’. International Journal of Public Sector Management, 13(4), 333–41.

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5. Anti-corruption and its discontents: reforming reform Michael Johnston

THIRTY YEARS ON After thirty years and more of agenda building, research, and activism the corruption control movement seems to be running in place.1 Hard work by dedicated and often courageous people and groups, at times working in daunting circumstances, has produced indifferent results at best. Why is that the case, what lessons can we learn, and what might make reform more effective? The critical observations offered in this chapter come from a friend of, and active participant in, the anti-corruption movement. I offer an argument for longer-term, more indirect, more varied and context-sensitive, and above all more political approaches to corruption control – approaches that do not so much supplant current reform ideas as seek to give them stronger political backing and social foundations. Those reform scenarios are long, indirect, and difficult in part because of the complexity and myriad forms of corruption – particularly where it is entrenched – and partly because they point to the challenges of confronting injustice and exploitation by political means. In those respects they emulate historical developments in some societies that have been comparatively successful in checking corruption. The reform movement has hardly been an utter failure. Corruption, for many years a non-issue in academe, business, and international policy, now has a prominent place on the global agenda. Any news search shows that it regularly appears as a serious issue. Annual corruption rankings continue to make headlines. Aid programs and investment decisions incorporate corruption as a prominent concern, and both would-be democratizers and anti-system populists cite elite exploitation and misconduct as major grievances. That heightened state of awareness is a significant reform accomplishment in its own right. Positive results, however, are another matter. Success in specific agencies and locales does come to light; the Hong Kong and Singapore reform sagas are familiar history. But clear-cut, sustained reductions in corruption in larger-scale, socially diverse societies are few and hard to document. Process-tracing evidence from the European Union’s ANTICORRP project (Mungiu-Pippidi and Johnston, 2017) points to several countries (Chile, Costa Rica, Estonia, Georgia, South Korea, Taiwan, Uruguay) as having checked corruption to varying extents. Rwanda and Botswana might be added to that list, although all such claims are open to dispute. Those cases offer valuable lessons, but most are comparatively small societies and (with the exception of Singapore and Rwanda) socially relatively homogeneous. Moreover, several (e.g. Chile, Estonia, Georgia, Rwanda) owe recent progress more to the effects of system-shaking crises than to any impact of the international reform movement. Indeed, Transparency International, commenting on its own 2018 Corruption Perception Index, notes that “It reveals that the continued failure of most countries to significantly control corruption is contributing to a crisis in democracy around the world. While there are exceptions, the data shows that 56 Michael Johnston - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:23PM via The University of British Columbia Library

Anti-corruption and its discontents  57 despite some progress, most countries are failing to make serious inroads against corruption” (Transparency International, 2018, emphasis in the original; see also Drapalova, 2019). Possible explanations for these problems abound. Mainstream anti-corruption strategies have not greatly evolved over time. They tend not to vary markedly, even across contrasting societies. Now as in the early 1990s, anti-corruption recommendations emphasize deterrence and punishment of what is assumed to be deviance on the part of specific people; references to corruption as “embedded” are routine, but reforms aimed at the systemic power imbalances that enable the few to abuse their powers and exploit ordinary citizens are few. Most reform scenarios revolve around whole-country, top-down efforts deploying what amount to crime-prevention and -detection techniques or improvements to administrative processes. Dedicated anti-corruption agencies (ACAs) are a frequent proposal, but in many cases seem to have problematic track records. Transparency, accountability, and calls for something called “political will” are parts of most conversations – even though corrupt systems often have no shortage of political will, but rather lack countervailing political powers. Independent judiciaries and news media, and support of unspecified sorts from civil society, are also routine suggestions (see the historical discussion in Johnsøn, 2016: 40–6, 66). All are fine ideas in themselves – if sometimes taking the form of slogans rather than detailed strategies and tactics – and yet progress remains elusive. Indeed, some countries, including some affluent established democracies, show signs of deterioration.

WHAT’S WRONG WITH THIS PICTURE? The problem is not that those are bad ideas. Indeed, it has been hard to improve upon them. And it would be unfair, again, to claim that nothing has evolved: less emphasis is given now to privatization, scaling back the state, and reliance upon markets in place of public institutions, and there is greater understanding of the global nature of some corrupt processes. The Organisation for Economic Co-operation and Development Anti-Bribery Treaty, Group of States Against Corruption, United Nations Convention Against Corruption, along with the venerable United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act of 2010, and perhaps France’s new Sapin II, are bringing essential cross-border scope to the struggle. New ways to measure corruption and assess the effects of reforms have emerged (U4 Anti-Corruption Resource Centre, 2016). Still, when it comes to recommendations for specific countries, corruption fighters from the early 1990s would be little surprised by initiatives in 2019. What are today’s most pressing reform dilemmas? None of the following is true of all reformers everywhere, but there are several chronic difficulties. Strategic Misconceptions We still tend to treat corruption as essentially the same thing everywhere – usually, as bribery or other quid pro quo dealings. It is often assumed to be a national attribute, best controlled via national offensives, and to be most serious in developing societies. Even where corruption is endemic or systemic, we deal with it largely as deviance – as a departure and/or deterioration from some better state of affairs but one that can be controlled by addressing specific actions and their perpetrators.

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58  Handbook on corruption, ethics and integrity in public administration We have too often gotten history backwards, mistaking outcomes for causes, and have turned it upside down, overstating the role of reform from above. As a result we misunderstand how relatively low-corruption countries got to where they are today, and have placed far too much faith in “best practices”. Too little thought has been devoted to asking what the opposite of “corruption” might be, what we seek, and how we might build support for it. Technocratic visions of “good governance”, and the principle of separating politics from administration, overlook the importance of justice broadly understood. As a consequence, we have underemphasized the political and social foundations required for sustaining positive changes. Moreover, we have been surprised by populist resentments of exclusion – rightly seen by Warren (2004) as the essence of corruption in a democracy – that divert energy and attention from more focused reforms, and that undermine trust in institutions and leaders working to improve the quality of government. We have placed excessive faith in transparency – a laudable virtue, but as a corruption-control approach, one that has problems. It addresses relatively little of what many citizens see as corrupt, frequently strengthens the position of already influential interests, and can even make corruption worse (Levine and Johnston, 2016). Transparency will accomplish little if citizens do not “look in”, if they are not able to act upon what transparency reveals, and if they do not feel safe in doing so. We still have few useful ways of measuring corruption and the effects (if any) reforms might have. As a result, it has been hard to develop and evaluate “targeted” reforms, to show that reform is making progress, or to abandon what is not working or proves counterproductive (a major reason why anti-corruption thinking has evolved so slowly). Similarly, we often overlook the value of “halfway” reforms, insisting instead on “zero tolerance” approaches that waste scarce political opportunities and are bound to fail. We have underestimated the collective action problems inherent in mobilizing support for corruption control, expecting citizens to get behind reform as a public good without offering them compelling reasons to do so. Challenging corruption can be a difficult and risky process; moreover, some citizens might have at least a small stake in the status quo – or think they stand to gain in the future. Others may fear that change is more likely to make life more difficult than to produce significant improvements. A related problem has been equating “civil society” with formal reform-oriented organizations prone to collective action problems all of their own. Slogans and Shibboleths Other recurring problems revolve around unexamined assumptions and ideas that need rethinking. One is the notion that corruption is the most important problem struggling societies face, and must be directly confronted on an emergency basis. Corruption does great harm in such societies, but there can be fundamental challenges – maintaining basic security and safety, building workable state institutions, fighting famine and disease – that are more urgent. That corruption may make those problems worse is hard to dispute, but directly confronting it – and the powerful figures with a stake in it – in the absence of sound institutions and a measure of personal security for citizens may well culminate in tragedy. We should try to recruit an anti-corruption army but must avoid marching it over a cliff. We frequently encounter the distinction between “grand” and so-called “petty” corruption. This enduring notion has intuitive appeal: massive fraud in public works construction, and

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Anti-corruption and its discontents  59 small extortion payments to the police by merchants, are not the same thing. But precisely what we gain from the grand versus petty distinction, particularly if it is invoked to minimize the importance of the latter situations, has never been made clear. Indeed, it may obscure more than it reveals: “petty” corruption helps keep poor people poor and the powerless vulnerable. A sound civil society strategy might actually place extra emphasis upon “petty” corruption (Matukhno, 2015). And what is and is not “petty”? The spark touching off Tunisia’s national upheaval was police abuse of a young fruit seller in an open market and his subsequent public suicide. The situation was mundane, the payments being extorted were small, and the official and victim were relatively humble figures, but the impunity with which the local police abused the young man suggests that they enjoyed the protection of – and may well have been corruptly beholden to – higher-level officials. In any event, the consequences of those events were anything but petty. Clearly the size and institutional level of corrupt dealings are worth thinking about carefully, but we need a comparative framework that clarifies the significance of those factors and incorporates other important variables. Calls for “political will” as the foundation for reforms are hardy perennials. Few would dispute that reform measures are likely to be more effective if backed by leaders at all levels, but “will” is a matter of intentions and dispositions, and as such is fundamentally unknowable until after the fact. We have all seen proclamations of “zero tolerance” that have come to naught, and reform campaigns that were mostly for show – or, worse, aimed at jailing critics of the regime. In the midst of reform there is no way to distinguish political will from the consequences we hope it will produce. If anything, many societies suffer from an excess of political will or, more precisely, from the weakness of institutions and forces that might otherwise restrain it. Political will or its absence may illuminate post hoc assessments of anti-corruption efforts, particularly if we break the general idea down into more specific sources of support, opposition, and indifference. But calls for political will often skip over the political complexity of corruption control. How do we know top-level political will would be decisive? Earnest intentions can run headlong into historical constraints, a lack of resources, or entrenched political opposition. Few would tell struggling societies to wait for a reform champion to appear before doing anything about corruption; but even if one should appear, what happens when she or he leaves the stage? A leader or regime might overcome obstacles by sheer force, political or otherwise, but that sort of “will” can do immense damage and would hardly foster anti-corruption strength in the rest of society. Indeed, if reforms fail, the political will argument may invite a process of blaming the victims: of course we gave Country X the right tools and ideas, but leaders (or the people) there just wouldn’t see them through. The real issue, then, is less one of elite “will” and more a matter of building sustained, broad-based demand, coalitions, and political incentives for reform (Johnston, 2014). In the end, if the term has any meaning at all the most productive “political will” may well flow from the bottom upward.

WHAT MIGHT BE BETTER? REFORMING REFORM Success in checking corruption will often be a long trek – even if there are periods of rapid change (Rothstein, 2011) – via indirect routes. Immediate direct offensives, given the power of entrenched interests, might bring harm to reform supporters and to society’s broader situation. Controlling corruption often has little to do with virtue or civic values, and much more

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60  Handbook on corruption, ethics and integrity in public administration to do with amassing enough political clout to check abuses by the powerful. That process has usually been contentious, deeply politicized, and driven by self-interest (Johnston, 2014: chs 1, 2). How then can we reform our reforms? Let us begin with two conceptual problems: the reform movement’s tendency to get history backwards, at times standing it on its head, and the need to recognize that corruption problems can differ in qualitative ways from one situation to the next. Things Are Not Always As They Seem Two assumptions frequently shape anti-corruption efforts: that struggling societies can and should emulate those that are apparently well governed today – usually, the affluent market democracies that have seen themselves as leaders of reform – and that what should be emulated about them is the array of institutions, laws, values, watchdogs, and other pro-integrity attributes in place today. If high-corruption countries put “best practices” in place, the argument runs, they have their best chance to bring the problem under control. But, setting aside the question of whether those leading countries have actually reduced corruption as much as it may seem, that argument often gets history backward (this discussion draws upon Johnston, 2014: ch. 2). Even if those countries are relatively successful now, the forces and institutions that help check corruption today are not necessarily what launched and enabled that process in the past. A free press, strong judiciary, a middle class and viable civil society, sound bureaucracies, the rule of law, political legitimacy, and the like are rightly seen as contributing to integrity. But at the time many societies began to draw effective limits around power, few of those assets were in place and corruption control did not take the form of dedicated efforts to erect those safeguards. More often, limits on rulers’ conduct were laid down in the course of political contention over a variety of issues: who governs whom, by what right and using what means, in pursuit of what goals, are among the core points of contention. So is the question of whether, and how, people might protect themselves and their own interests from exploitation and abuse. While corruption often featured in the language and symbolism of contention (Peck, 1990), reform as a public good – “better government for all” – had little to do with many of those struggles. Many anti-corruption ideas and assets are more likely the outcomes of deeper developments that helped define key roles and boundaries, not the initial causes of progress against the problem. They emerged and were at least somewhat effective because they had sustained political support grounded in self-interest – support from people and groups who may not have had good-governance schemes in mind but who sought to end abuse and exploitation. That good-government principles might well benefit today’s extensively corrupt societies may well be true, but too often we attempt to jumpstart reform by starting, in effect, with outcomes rather than causes – in effect, getting history backwards. When that happens, leaders and the rule of law lack credibility, institutions will be short on legitimacy, and newly minted controls will lack a supporting constituency with a vested interest in their effectiveness.2 We see variations on that theme today: many countries already have most of the laws they need (even if penalties need updating), have established an ACA, and have embarked on externally funded governance projects – but few in society have a stake in their success, the power to demand effective enforcement, and reasons to take a stand against entrenched corrupt interests. Envisioning reform primarily as a series of national programs or projects implemented from above, rather than in terms of challenging the powerful from below, is what I mean by turning

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Anti-corruption and its discontents  61 history upside down. Corruption is often regarded as a national attribute caused and shaped by national characteristics and therefore best addressed via national-level policy and changes – an outlook reinforced by our emphasis on statistical models analyzing one-dimensional whole-country corruption scores. National attributes do matter: does a society have (for example) a dominant public sector, an economy dependent upon mineral extraction, or deep ethnic divisions? But actual corruption cases originate not in particular combinations of national characteristics, but in niches such as relationships between specific procurement officials and vendors, collusion among a ring of customs officials, or contradictory regulations about the use of one budget line by a local education authority. National-level attributes may facilitate or inhibit such connections, but resistance from below and political support for those seeking to govern well can be critical too. It will be argued, quite rightly, that contention scenarios assume a degree of liberty and security or, at least, of political space; that they require an array of voices active in society; and can be long term and risky as they unfold. But that does not mean reform must await a high-profile reform “champion” or the arrival of liberal democracy (which, after all, will bring corruption risks of its own). Isham et al. (2000) have shown that even in undemocratic societies basic civil liberties – freedom to occasionally criticize the regime in public – are linked to more effective use of aid. Basic political challenges – inter alia, fostering pluralism and creating safe and valued political space (Johnston, 2014) – must often be addressed before dedicated anti-corruption efforts can mobilize lasting support. The notion that social pressure is essential to reform is widely recognized, but sometimes in unproductive ways. Too often, efforts to “get civil society involved” focus on formal, reform-oriented organizations, many of them donor-funded and operating in national capitals, and around agendas focusing on corruption control as a public good. The collective action problems inherent in that approach are clear and, often, decisive. The real strength of civil society is more likely found in activities that may have little to do with public purposes, but that help build lasting networks, leadership skills, and trust. During the critical early phases of Spain’s successful transition to democracy, for example, there were not many autonomous formal organizations (Torcal and Ramon Montero, 1999). What Spain did have, however, were strong and widespread traditions of social activity in neighborhoods and among families – activities that were a natural source of local leaders and that likely helped build mutual trust (Johnston, 2009: 11). Much the same pattern was also seen in Portugal. Reformers might do well to encourage and protect the formation of all manner of social networks – social groups; organizations for women, students, farmers; labor unions, recreational and artistic associations; and many more. Those groups and networks can develop deep social roots and have many potential uses: in our possibly overoptimistic (Putnam, 2000) scenarios about civil society in the United States, for example, community residents who want to clean up a park usually do not organize a formal group for that sole purpose. Instead, neighbors, members of fraternal groups, hiking enthusiasts, and others draw upon their own and shared networks and get the job done. Various side benefits, such as free beer and a barbecue at the end of the day, help make group cooperation all the more attractive. Few of those groups will have explicit anti-corruption agendas, although some might take action against related grievances; but down the road, all might contribute to networks of communication and trust useful for challenging official exploitation.

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62  Handbook on corruption, ethics and integrity in public administration Not Just a Singular Problem A second conceptual roadblock is the implicit assumption that corruption is essentially the same thing wherever it occurs – frequently, treated as synonymous with bribery. I write “implicit” because few would state such ideas as positive propositions. Still, from the persistent focus on whole-country corruption rankings to reform recommendations that vary remarkably little across time and space, we have not given sufficient thought to the ways in which corruption might vary qualitatively in light of contrasting histories and circumstances. A great deal of corruption does occur in the form of bribery, for example, but we also see political collusion, official theft, conflicts of interest, and various forms of money laundering. And those are just examples of practices that are clearly illegal. Legal or “institutional” corruption (Thompson, 2018; Lessig, 2013), a range of fully legal political contributions, institutional and state capture, and rents and privileges written into law (Stiglitz, 2012) have a more disputed status vis-à-vis formal definitions of corruption, but trigger many citizens’ perceptions that their legitimate interests have been pushed aside by the influence of money (Sandel, 2012). In some societies corruption functions as a kind of alternative to violence (Huntington, 1968) while elsewhere – Mexico, for example, with the plata o plomo choices (Contreras, 2014) forced by drug cartels – the two are closely paired. Some corruption is a free-for-all, undermining public order and disrupting markets, while elsewhere it is monopolized by top figures and doled out as patronage – a means of control. In still others, corrupt collusion helps unify ruling coalitions in the face of rising competitors, sustaining a de facto predictability that can coexist with sustained economic growth. Elsewhere, the effects of corruption upon economic development are devastating. Most forms of corruption are linked to power or authority in a particular place, but some connections between wealth and power in affluent market societies have a way of spreading into the global system via a range of “institutional corruption” practices (Thompson, 2018; Lessig, 2013). Those sorts of contrasts (explored in more detail in Johnston, 2014) have major implications for both the consequences and cures of corruption, and yet they are seldom factored into corruption rankings or scenarios for reform. What are the most important contrasts to understand? A few commonsense differences come to mind: when citizens, farmers, and business people must assume they will be pressured for corrupt payments in the course of a day or week, life differs from other places where corruption is rare. Some useful distinctions have emerged in the literature, such as that between “need” and “greed” corruption (Bauhr, 2016). Graycar’s TASP framework (Type, Activities, Sectors, Places) offers a useful way to map out occurrences and vulnerabilities (Graycar, 2015). But most typologies of corruption techniques categorize details of debatable importance, rather than analyzing deeper contrasts in incentives, stakes, opportunities, the social and institutional setting, and consequences. We need to dig deeper. Improved typologies grounded in theory about fundamental systemic contrasts, applicable to diverse cases, and specifying the causal links between those differences and important observed contrasts, would do much to focus reform efforts on essential issues, help us avoid making matters worse, and account for the effects – if any – that our efforts produce. Any such schemes must take into account the difficulties of measuring corruption and the ways those problems may differ from one sort of situation to the next. Some attempts at such comparative frameworks have been made (Wedeman, 1997; Johnston, 2005, 2014) but they are much in need of refinement.

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Anti-corruption and its discontents  63

NO WAY OUT BUT THROUGH3 There is no neat formula or roadmap for more effective corruption control. “Toolkit” (other than for highly specific administrative issues) collections of best practices typically oversimplify problems that may reflect deep-rooted political imbalances between the powerful few and the vulnerable many, long-established relationships and expectations, and important contrasts emerging out of local history, social structure, economic fundamentals, and regional or global influences. Indeed, until we trade whole-country perception ratings for tightly focused and evidence-driven assessments of the quality of government that enable us to track detailed changes in timely fashion (Johnston, 2010; see also the ERCAS Index of Public Integrity outlined in Mungiu-Pippidi, 2016) we are unlikely to know very much about the scale of problems we are addressing, where they originate, and whether reforms are having any effect. At present, few reform claims along the lines of “do X and Y will happen” are credible. If, on the other hand, we attempt to reduce the political imbalances noted just above, some notes of caution must be kept in mind. First, do no harm (Johnston, 2010): it is entirely possible, indeed all too easy, to do harm in the name of doing good. Reforms that are premature and lack a solid base of political and social support grounded in lasting interests may endanger citizens and groups vulnerable to reprisals, but harm society as a whole if reform opportunities are lost or citizens, investors, and aid partners conclude that reform efforts are futile. Meanwhile, corrupt operators may decide that even a failed reform push means they had better take as much as they can in the short run, and get better at covering their own tracks. Trust and credibility are essential: Citizens have heard anti-corruption themes before, and may well have seen them produce little positive change. Indeed, they may well have seen corruption control used as a pretext for seizing power or for continued elite enrichment. In post-conflict or deeply divided societies, citizens may distrust each other as much as corrupt officials, intensifying collective action problems, and perceive self-proclaimed reformers as yet another threatening influence. But listening to their specific grievances – not just corruption in general, but (for example) poor utility services, health systems devoid of personnel and resources, police who work harder at collecting bribes than at protecting the public – can identify issues in which many citizens could have a common stake. Demonstrating improvements in those areas via widely published indicators and benchmarks can build the credibility of reform, minimize collective action problems as citizens sense a personal stake in effective controls, and foster trust in the more honest officials. It may be that such efforts should not even mention corruption as such, but rather focus on a few key services and institutions and improvement in demonstrable ways. In that connection, “working with civil society” must involve the whole country, as much as possible, reaching beyond the orbit of familiar non-governmental organizations and into local and regional social networks, and must proceed with a realistic understanding of collective-action problems and how they arise. Do what you do do well4: As noted, credibility is a primary challenge for reformers, particularly where the rule of law is weak and political processes are dominated by powerful corrupt operators. Particularly at the outset it would be better for reformers to attain modest goals on a regular basis – and of course, to call attention to such accomplishments – than to attack “the worst, first”, proclaiming massive anti-corruption offensives that will once again likely amount to little. But “picking the low-hanging fruit” cannot become a permanent or default

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64  Handbook on corruption, ethics and integrity in public administration approach. At some point entrenched corrupt figures will have to be confronted, but it is far better to do so from a position of credibility and relative strength. Establishing an ACA will not always be a wise idea, particularly in response to deeply entrenched corrupt regimes and private interests. In the former instance the agency can be vulnerable to capture from above (if indeed it was not set up as a mechanism of control from the beginning). In the latter, it may be ineffective in the face of powerful business or military figures, or malefactors backed by extensive networks, who abuse personal power to compromise courts and law enforcement. The two most successful ACA stories are those of Hong Kong (the Independent Commission Against Corruption (ICAC)) and Singapore (Corrupt Practices Investigation Bureau), and ACAs are frequently proposed elsewhere. But both of those places are small societies, well positioned by location and economic bases to capitalize upon low-corruption reputations. Most other societies are considerably larger, more diverse, and economically differentiated, and thus face different orders of challenges in corruption control. It is also worth noting that neither Hong Kong nor Singapore is a democracy, which means that the new ACAs would face little open opposition. By contrast, consider the ICAC of New South Wales, Australia, an excellent organization that nonetheless has often had to deal with loud accusations of favoritism by one political party or another. In the end, the deep democratization argument brings us back to the main reason why corruption is worth worrying about, i.e. justice. Can people be governed – and, ideally, govern themselves – in ways that are both effective and fair? Corruption is by no means the only reason why societies, many of them outwardly successful, fall short of those ideals; significant reform will scarcely put everything right. Still, the most effective way forward may be to begin, not so much with corruption as a form of rule breaking, or with the process-oriented shortcomings of public institutions – important though all those concerns undoubtedly are – and focus more upon politics. We should ask who uses power to abuse citizens and society, and how they do it: who can be mobilized in lasting ways to oppose corrupt operators, and what issues and appeals will be most effective for energizing that mobilization while minimizing collective action problems; and how the needs and aspirations of citizens can become a political force for greater fairness and justice. That path toward better government will be long, contentious, and marked by setbacks; where progress is made it will often be indirectly and as an outcome of political clashes that may not focus directly on corruption. But it is a process that can emulate events and deeper developments beginning long ago by some of today’s better governed societies. Many reformers are not comfortable with explicitly political strategies and tactics, but the ideas sketched out here may help build a politically strong and sustainable anti-corruption presence while enabling citizens to drive the process of reform in the course of pursuing and defending their own interests.

NOTES 1. 2. 3. 4.

Parts of this chapter draw, in revised form, upon Johnston 2018. Frederick Douglass put it best in 1857: “Power concedes nothing without a demand. It never did and it never will.” Online at www​.blackpast​.org/​1857​-frederick​-douglass​-if​-there​-no​-struggle​-there​-no​ -progress​#sthash​.Orl1tuhb​.dpuf (viewed March 30, 2017). With apologies to Robert Frost… That phrase was the title of a popular country music song recorded by Ned Miller in 1965.

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Anti-corruption and its discontents  65

REFERENCES Bauhr, Monika. 2016. “Need or Greed? Conditions for Collective Action against Corruption”. Governance. Early view version online at http://​onlinelibrary​.wiley​.com/​doi/​10​.1111/​gove​.12232/​ abstract (viewed November 1, 2019). Contreras, Raoul Lowery. 2014. “‘Plata o Plomo’, Silver or Lead”. The Hill, September 4. Online at http://​thehill​.com/​blogs/​pundits​-blog/​immigration/​216598​-plata​-o​-plomo​-silver​-or​-lead (viewed November 1, 2019). Drapalova, Eliska. 2019. “Corruption and the Crisis of Democracy”. Transparency International Anti-Corruption Helpdesk Answer, March 6. Online at https://​docs​.google​.com/​viewer​?url​=​https​ %3A​%2F​%2Fknowledgehub​.transparency​.org​%2Fassets​%2Fuploads​%2Fhelpdesk​%2FCorruption​ -and​-Crisis​-of​-Democracy​_2019​.pdf (viewed November 1, 2019). Graycar, Adam. 2015. “Corruption: Classification and Analysis”. Policy and Society 34:2 (September), pp. 87–96. Huntington, Samuel P. 1968. Political Order in Changing Societies. New Haven: Yale University Press. Isham, Jonathan, Daniel Kaufmann, and Lant Pritchett. 2000. “Civil Liberties, Democracy, and the Performance of Government Projects”. World Bank Economic Review 11:2, pp. 219–42. Johnsøn, Jesper. 2016. Anti-Corruption Strategies in Fragile States: Theory and Practice in Aid Agencies. Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing. Johnston, Michael. 2005. Syndromes of Corruption: Wealth, Power, and Democracy. Cambridge: Cambridge University Press. Johnston, Michael. 2009. “Social Capital and Democratic Development in Spain: Six Hypotheses in Search of a Concept”. Presented at a United States Government agency conference on Measuring Social Capital, Arlington, VA. Johnston, Michael. 2010. “First, Do No Harm – Then, Build Trust: Anti-Corruption Strategies in Fragile Situations”. Background paper for the 2011 World Development Report. Washington, DC: World Bank, http://​siteresources​.worldbank​.org/​EXTWDR2011/​Resources/​6406082​-1283882418764/​WDR​ _Background​_Paper​_Johnston​.pdf (viewed November 1, 2019). Johnston, Michael. 2014. Contention, Corruption, and Reform: The Power of Deep Democratization. Cambridge: Cambridge University Press. Johnston, Michael. 2018. “Reforming Reform: Revising the Anticorruption Playbook”. Daedalus 147:3 (Summer), pp. 50–62. Lessig, Lawrence. 2013. “‘Institutional Corruption’ Defined”. Journal of Law, Medicine, and Ethics (Fall), pp. 2–4. Levine, Bertram J., and Michael Johnston. 2016. “The Compliance Equation: Creating a More Ethical and Equitable Campaign Financing System by Blinding Contributions to Federal Candidates”. In Aaron S. Kesselheim and Christopher T. Robertson (eds), Blinding as a Solution to Bias: Strengthening Biomedical Science, Forensic Science, And Law (pp. 278–96). Amsterdam: Elsevier/Academic Press. Matukhno, Natalia. 2015. “Estimating the Effects of Anticorruption Strategies: Causal Analysis via Synthetic Control Method of Reforms in Estonia, Georgia, Chile, and Uruguay”. Presented at the ANTICORRP “Virtuous Circles” workshop, Grünewald, Berlin, July 8–11. Mungiu-Pippidi, Alina (ed.). 2016. “Special Issue: Measuring Corruption in Europe and Beyond”. European Journal on Criminal Policy and Research 22:3 (September). Mungiu-Pippidi, Alina, and Michael Johnston. 2017. Transitions to Good Governance: Creating Virtuous Circles of Anticorruption. Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing. Peck, Linda Levy. 1990. Court Patronage and Corruption in Early Stuart England. Boston, MA: Unwin Hyman. Putnam, Robert. 2000. Bowling Alone: The Collapse and Revival of American Community. New York: Simon and Schuster. Rothstein, Bo. 2011. “Anti-Corruption: The Indirect ‘Big Bang’ Approach”. Review of International Political Economy 18:2, pp. 228–50. Sandel, Michael J. 2012. What Money Can’t Buy: The Moral Limits of Markets. New York: Farrar, Straus, and Giroux.

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66  Handbook on corruption, ethics and integrity in public administration Stiglitz, Joseph E. 2012. The Price of Inequality: How Today’s Divided Society Endangers Our Future. New York: W. W. Norton. Thompson, Dennis. 2018. “Theories of Institutional Corruption”. Annual Review of Political Science 21, pp.  495–513. www​.annualreviews​.org/​doi/​pdf/​10​.1146/​annurev​-polisci​-120117​-110316 (viewed November 1, 2019). Torcal, Mariano, and Jose Ramon Montero. 1999. “Facets of Social Capital in New Democracies: The Formation and Consequences of Social Capital in Spain”. In Jan W. van Deth, Marco Maraffi, Kenneth Newton, and Paul F. Whitely (eds), Social Capital and European Democracy (pp. 167–91). London: Routledge. Transparency International. 2018. “Corruption Perceptions Index 2018”. Online at www​.transparency​ .org/​cpi2018 (viewed November 1, 2019). U4 Anti-Corruption Resource Centre. 2016. “The Proxy Challenge Award 2016”. Online at www​ .cmi​.no/​events/​1751​-the​-proxy​-challenge​-award. Bergen: U4 (Chr. Michelsen Institute) (viewed November 1, 2019). Warren, Mark. 2004. “What Does Corruption Mean in a Democracy?”. American Journal of Political Science 48:2, pp. 328–43. Wedeman, Andrew. 1997. “Looters, Rent-Scrapers, and Dividend-Collectors: Corruption and Growth in Zaire, South Korea, and the Philippines”. Journal of Developing Areas 31:4 (Summer), pp. 457–78.

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6. Dealing with the dark side of policy-making: corruption, malfeasance and the volatility of policy mixes Michael Howlett

INTRODUCTION: PROFESSOR PANGLOSS AND THE VOLATILITY OF POLICY DESIGNS Current work on policy-making often adopts a Panglossian vision of the subject, viewing policy-making activity as a well-intentioned effort on the part of governments to serve the public interest by addressing problems in a dispassionate, technical way (Arestis and Kitromilides 2010). Even those studies which insist on the political and power-based nature of policy narratives and target constructions still hold out hope that evidence-based policy solutions can still emerge from policy processes and be implemented effectively (Feldman 2018; Oliver and Pearce 2017). Such thinking does a disservice to both policy studies and practice, however, by failing to address head-on the possibilities that (a) policy-makers are driven by malicious or venal motivations rather than socially beneficial or disinterested ones and (b) policy targets also have proclivities and tendencies towards activities such as gaming, free-ridership and rent-seeking that undermine effective policy-making (Feldman 2018; Hoppe 2017). The degree to which such aspects of policy-making are possible in any particular context can be said to influence the degree of “volatility” found in a policy arena, that is, the likelihood or propensity of certain instruments and certain design situations to lead to the deployment of instruments and tools which involve a high risk of failure. This can be contrasted to more stable tools and mixes, and more stable contexts, in which emergent designs are more likely to approximate the image often set out in the literature on the subject.

THE DARK SIDE OF POLICY-MAKING: DEALING WITH MALICIOUSNESS AND WILLFUL IGNORANCE IN PUBLIC POLICY-MAKING The general problem of poor or self-interested behavior interfering or undermining efforts to promote the public good, of course, is one of the oldest in studies of politics and public administration (Saxonhouse 2015). These have outlined many aspects of these problems which are policy relevant but are often ignored or downplayed in thinking and writing about policy-making. These problems range from the use of public authority to promote the interests of ethnic, religious and other favored groups or specific sets of “clients” (Gans-Morse et al. 2014; Goetz 2007) or penalize or punish others (Howlett 2017), rather than the public interest, to (mis)use 67 Michael Howlett - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:27PM via The University of British Columbia Library

68  Handbook on corruption, ethics and integrity in public administration Table 6.1

Problematic aspects of tool deployment by interest served Key actors Public agencies

Regulated private Private actors and public actors

Public

Altruism and public good (beneficial program design and delivery)

Interest served

Private

Corruption/clientelism/group/ethnic favoritism

Gaming rules

Gaming/crime fraud

policy to enrich or otherwise benefit policy-makers and administrators (Uribe 2014), and to use policy to manipulate a variety of activities of target groups through, for example, vote-buying or other forms of electoral pandering (Brancati 2014; Manor 2013) (see Table 6.1). Although omnipresent in popular accounts and traditional and social media visions of policy-making, these activities are generally absent from standard textbooks and other works on policy-making (Anderson 1975; Howlett 2009; Weimer and Vining 1989) which often take it as self-evident that policy-making and policies are developed in accordance with the best evidence and practice in order to generate public value (Mintrom and Luetjens 2018; Moore 1994, 1995). While this is a noble thought, the evidence of corruption, collusion, clientelism and other forms of “bad” policy-making behavior is all around us (Dahlström et al. 2012) and is a pervasive trope in the popular media (Cappella and Jamieson 1996). And this behavior extends beyond the activities of just policy-makers to the equally understudied phenomenon of policy-taker perversion of even the noblest efforts at generating public value. Both such behaviors should serve as cautionary notes for policy-makers and serve as constraints which should be considered in articulating criteria for developing and evaluating effective policy designs and dealing with the risks of policy failure (Peters et al. 2018; Taylor et al. 2013, 2019). This is especially the case with designs which implicitly or explicitly rely on goodwill and engaged, compliant, target group behavior for their effectiveness, such as co-production, collaboration and other forms of voluntary regulation (Ansell et al. 2017). But these also extend to all other forms of policy activity and instrument use, from the provision of loans and subsidies to the creation of administrative rules and the provision of information (Howlett 2019a). Policy designers concerned with the resiliency and robustness of their designs (Howlett 2019b) need to anticipate such behavior and take steps in their designs to prevent its occurrence or channel it towards the public good (Schultze 1977; Blanc 2018). The Problems of Maliciousness and Willful Ignorance The fact that false, biased or misleading information enters into political discussions and policy deliberations is not new and the policy sciences have always recognized the limits or bounds of knowledge in policy-making (Simon 1967, 1978; Jones 2002). Similarly, the idea that policy problems are at least in part socially constructed and the nature of policy problems, solutions and targets are biased in various ways is also an old insight (Schneider and Ingram 1993, 1998; Foucault 1979; Lemke 2000). Both of these components of policy-making and their impact on policy work and analysis have been a steady subject of debate and interest in the field for decades (Fischer 1987; Fischer and Forester 1993). Nevertheless, with respect to the role of knowledge or the epistemologies of policy-making and policy analysis, policy scientists have always viewed themselves as following a mode of “speaking truth to power” (Wildavsky 1979); that is, assembling and presenting verifiable

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Dealing with the dark side of policy-making  69 facts and evidence about what works and what does not to policy-makers, taking steps to offset biases and overcome limitations on knowledge in so doing. Epistemologically speaking, the underlying theory of knowledge behind the mainstream policy sciences, existing as a pre-supposition for much analysis and deliberation, has always been a “realist” one; that is, a stance towards the world in which it is assumed that “evidence” objectively exists and can be marshaled by careful study and analysis to address specific kinds of policy problems. Generations of policy scholars have advanced, applied, and refined rational or instrumental models and approaches to policy-making that interpret the policy-making process based on the principal assumption that all policy participants are able to distinguish fact from fiction, even if conflicts over meaning and strategy are endemic to the politics of policy-making (Tribe 1972; Goodin 1980; Saward 1992; Hawkesworth 1992). This approach has always acknowledged the limits of cognition, or the social and ontological “boundedness” of rationality, but has rarely dealt with the perpetual desire of self-interested parties, from decision-makers to policy targets, to hijack, distort or otherwise reorient public processes towards their ends and goals (Jones 2002; Habermas 1974). The former concern, relating to the difficulties of predicting accurately all possible courses of action and their implications, has led policy scientists to deal with both actual uncertainty or a true lack of knowledge about future states of affairs (Manski 2011, 2013; Morgan and Henrion 1990) as well as with a related but different epistemological concern: ignorance on the part of policy-makers or targets. Both are considered to be major sources of policy failure even when policies are well intentioned and evidence-based (Bovens and t’Hart 1996; Howlett 2012). The policy sciences are well prepared to deal with the second issue of a lack of knowledge representing a correctable deficiency in existing knowledge. This, it is commonly argued, can be ameliorated by careful knowledge transmission and persistent education activities directed either towards policy-makers who may be ignorant, for example, of the latest science on an issue such as climate change, or of policy targets who likewise may not know about a program or subsidy for which they are eligible. In fact some scholars have characterized the work of policy analysis as a whole in precisely these terms, that is, as involving principally the effort to generate and disseminate as much policy-relevant knowledge as possible, ensuring decisions are taken which are fully cognizant of all “known-knowns” (Hawkesworth 1992; Chow and Sarin 2002). The first concern, on the other hand, is related to the limits or bounds of knowledge which policy-makers need to be cognizant of in assessing policy options and determining specific courses of action (March 1978; Forester 1984; Jones 2001, 2002). These are the “unknown-unknowns” so famously described by former United States Secretary of Defense Donald Rumsfeld in his ruminations of what led to the policy fiasco of the invasion of Iraq. The one epistemological effort aims to transform ignorance by the injection of knowledge, converting inappropriate and incorrect knowledge into more reliable evidence which can better inform the actions of policy-makers and -takers. And in the second, the recognition of the boundedness of knowledge is seen not as an excuse not to undertake good faith efforts at better empirical description and analysis of the social world and the impact of specific kinds of government interventions within it, but rather as a warning to all parties of the imperfect nature of knowledge, the difficulties involved in predicting the future, and the need to hedge reason against uncertainty and act in a prudential or precautionary fashion if the public interest is to be served (Dunn 1991; Van der Sluijs 2005; Manski 2011).

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70  Handbook on corruption, ethics and integrity in public administration Table 6.2

The epistemology of maliciousness Extent of knowledge of policy problems and solutions High Low Instrumental rationality/reason Ignorance

Nature of knowledge utilization

For the public good

Policy problem: boundedness,

Policy problem: propensity for

uncertainty

avoidable policy failure, blame

Solutions: more and better

Solutions: enhanced education,

analysis, prudence

better knowledge dissemination and transmission

For particular gain

Maliciousness

Willful ignorance

Policy problem: high private

Policy problem: high propensity

value, low or negative public

for avoidable policy failure

value Solutions: transparency

Solutions: suppression, legal

and accountability, legal

proscription

proscription

Source: Perl et al. 2018.

Both these fixes, however, assume that the end of policy-making is to serve the public interest and enhance public value (Mintrom and Luetjens 2018; Moore 1995) and that what can be thought of as errors of omission and commission in policy-making are unintentional, with all participants amenable to learning and carefully considered action. Although studied much less frequently, of course, a more Machiavellian stance towards the policy process exists, in which a much more malicious intent informs policy deliberations and actions (Goodin 1980; Riker 1986; Saward 1992; Schultz 2017). As highlighted by many studies of corruption and clientelism in government decision-making (Scott 1969; Treisman 2007), for example, this stance towards knowledge is an alternative to prudential reason which utilizes certain types of evidence and facts while ignoring others in promoting and disseminating self-interested policy alternatives. In such efforts, lies and mis-statements and appeals to emotional and cultural stereotypes and attribution of false motives to rivals and targets are quite common (Goodin 1980; Maor 2015; Perl et al. 2018). Maliciousness also motivates a fourth policy-making stance, the analogue of “classical” unintentional ignorance to evidence, which is “willful” or intentional ignorance, the phenomenon of burying one’s head in the sand or purposely ignoring existing evidence and persisting with false beliefs (Proctor and Schiebinger 2008). This has come to the fore in contemporary policy-making and commentary around the Trump, Orbán and other recent neo-nationalist administrations in Europe, North America and elsewhere (Richey 2017; Oliver and Wood 2014; Pasek et al. 2015; Del Vicario et al. 2017; Perl et al. 2018). Whether such actions are taken for the personal enrichment of proponents or for evil purposes such as the elimination, oppression or exploitation of rival groups or ethnicities, malice in this sense is a rival epistemological stance to the policy analytical orthodoxy. It is one in which instrumental reason is still present in policy-making but is exercised in the individual or group self-interest rather than for that of the public (see Table 6.2). Like ignorance, the malicious use of knowledge to manipulate policy processes is also anathema to traditional policy science, not only on moral grounds, since it typically replaces the public interest with the private as the chief criterion for policy adoption, but also on epistemological ones as it undermines the ability of analysts to accurately describe and convey an

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Dealing with the dark side of policy-making  71 objective appraisal of costs and benefits to policy-makers in that interest. Such actions have been studied from time to time – such as when policy actors spin and misinform policy-making by introducing inaccurate information into policy debates and deliberations as happened in the 1960s and 1970s around tobacco control and more recently around global warming (Oreskes and Conway 2011) – but not systematically. Dealing with the Adverse Behavior of Policy-Takers Most of the concerns raised above, when they have been examined, have been analyzed in the case of policy-makers. But there is a large second area of concern which also exists: that related to the adverse or malicious behavior of policy-“takers”. This issue also has to do with mendacity and/or Machiavellian behavior on the part of policy-takers, a subject often glossed over in studies of policy compliance and “target behavior” (Howlett 2018). Here the idea commonly found in the policy literature is that the only real issue in policy compliance is merely a matter of “getting incentives (and disincentives) right” (Howlett 2018). This not only ignores aspects involved in the social and political construction of targets highlighted above (Schneider and Ingram 1990a, 1990b), but also minimizes the complex behaviors which go into compliance, most notably considerations of legitimacy, but also related to cupidity, trust and other social and individual behavioral characteristics as well as the operation of a wide variety of descriptive and injunctive social norms (Howlett 2019a; Bamberg and Moser 2007; Thomas et al. 2016). Not the least of the problems with this view is that it has a notion of policy-takers as static targets who do not try, or at least do not try very hard, to evade policies or even to profit from them (Howlett 2019a; Braithwaite 2003; Marion and Muehlegger 2007). Such activities on the part of policy-takers, however, are key in determining the success of various government initiatives ranging from tobacco control to bus fare evasion (Delbosc and Currie 2016; Kulick et al. 2016) and should be “designed for” in the sense that determined non-compliance and gaming should be taken into account in designing policies, along with many other such behaviors, such as free-ridership, fraud and misrepresentation (Harring 2016). As it stands, these are often thought of as purely “implementation” issues and left up to administrators to deal with rather than forming an essential component of policy formulation and design (Doig and Johnson 2001; Kuhn and Siciliani 2013).

DEALING WITH VOLATILITY IN POLICY DESIGNS It is well recognized that even when policies are designed with a clear evidentiary basis in a model formulation process so that they are well suited to the issues and concerns of the contemporary era, they may still fail over time if they do not adapt to changing circumstances and concerns as policy implementation proceeds and the policy is put into action (Nair and Howlett 2016; Bennett and Lemoine 2014a, 2014b). This suggests a need to be able to design and adopt policies featuring some level of agility and flexibility in their components and processes. In more turbulent circumstances, for example, where policy ideas and actors change frequently (Howlett and Ramesh 1998), policies must be designed to be flexible. In practice, this means policies and policy-making require additional and redundant resources and capabilities which allow them to change

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72  Handbook on corruption, ethics and integrity in public administration Table 6.3 Tool type

Tool volatility and design alternatives Flaw

Perverse results

Solutions Procedural tools

Organization

Public failure/corruption/

Diversion of public

Accountability/transparency/etc.

state-owned enterprises

resources to private

Anti-corruption bureaus

contracting

aims/end

Blockchain bidding and procurement/contracting records

Co-production clientelism

Fraud squads Authority

Regulatory gaming/capture

Diversion of public

Careful design, monitoring and learning

Bribes and kick-backs

ends to private

Whistleblower laws Sunset laws Merit appointments Conflict of interest laws

Treasure

Gaming/fraud

Diversion of public

Complete contracts, careful subsidy/tax design

resources to private

Monitoring and verification/enforcement/

Private gain

More carefully targeted messages

inspections Nodality

Diversion of individual/group message for private ends, e.g.

Truth in advertising laws

propaganda or blackmail

course as conditions change, including feedback mechanisms and procedures for automatic or semi-automatic adjustment (Pierson 1992, 1993; Baumgartner and Jones 2002; Jacobs and Weaver 2015).1 This is also true of what is needed to deal with volatility in policy mixes. That is, when policy tools are utilized which are subject to gaming, fraud or misrepresentation, for example, additional resources are required to build in the accountability, monitoring and auditing functions required for such mixes to operate effectively (Blanc 2018). In general there are several causes of policy volatility which can be situated in the relationships which exist between well- and other-intentioned policy behavior on the part of policy-makers and policy-takers. These take different forms, however, depending on the policy tools involved. Hence most perversions of the public interest such as corruption are organizational in nature and can be cured through a combination of organizational and regulatory activity such as the creation of anti-corruption agencies and the development of more effective financial and recruitment controls, including limits of party funding and government contracting and procurement activity (Graycar 2015; Graycar and Prenzler 2013; Phillips and Levasseur 2004). Other perversions have a more quasi-governmental aspect and affect other policy tools such as authority-based (regulatory) ones or financial instruments. These range from more prosaic forms of regulatory capture (Levine and Forrence 1990) to the gaming of regulations and sophisticated swindles and abuses of government treasury and tax largesse (Doig and Johnson 2001; Raghunandan 2018). These require the use of careful monitoring of policies and regulatory behavior and the use of acts such as the Federal Advisory Commission Act in the United States or various lobbyist registries controlling regulator–regulatee interactions through enhanced mandatory transparency (Chari et al. 2007; Carpenter and Moss 2013; Karty 2002). Incomplete contracts and poor procurement practices, for example, can allow government procedures and rules to be gamed at the public expense and require better legal construction and design (Scott and Triantis 2005).

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Dealing with the dark side of policy-making  73 As Table 6.3 shows, designs based on nodality and nudges and/or treasure resources (e.g. those most closely associated with “modern” collaborative governance) are always highly volatile as incentives are ripe for cheating and gaming and protections are often low. Therefore there is a need to “design in” correctives such as accountability mechanisms, verification and monitoring plans and the like right at the outset in order to ensure these are locked in and left in place as the program or policy matures (Plaček et al. 2018; Vine and Sathaye 1999). Other designs based on authority or regulation tend to decline over time (capture/corruption). Again this can be controlled for right at the start through the use of procedural devices such as sunset clauses and term limits, conflict of interest rules, ethics commissioners and similar kinds of administrative procedures (McCubbins et al. 1987). There is a need to assess risks of failure right at the outset (Falco 2017; Taylor et al. 2019). The bottom line however is that while all designs are susceptible to gaming and corruption, not all are as volatile as others. That is, volatility is (1) not always at the same point in time (creation versus after some time), (2) not always manifested in the same way and (3) requires different ways to correct for problems. Market mixes are always vulnerable and highly volatile and require constant monitoring. Regulatory or organizational alternatives are also vulnerable but less volatile or more inert; mainly requiring control over the long term to avoid capture and corruption.

CONCLUSION: THE NEED FOR RESILIENCE AND ROBUSTNESS IN POLICY DESIGNS Recent studies of policy design have established insights, which are often lambasted but which can reduce volatility if used properly, into the question of what makes a policy design “sticky” or more likely to remain in place over the long term. Path dependency, for example, is a well-known phenomenon in social processes (Arthur 1989; Arthur et al. 1988; David 1985; David and Parker 1986; Liebowitz and Margolis 1995, 1990) which has been applied with effect in the policy sciences in order to understand the construction and maintenance of policy trajectories – that is, how initial policy actions remain more or less in effect over a long period of time, often being reinforced and made more difficult to change (“locked in”) by the passage of time (Greener 2005; Cox 2004; Deeg 2001). Although much of the literature on path dependency and lock-in focuses on questions around (sub)optimality and (in)effectiveness of policy mixes which have evolved in this way (Peters et al. 2018; Howlett and Rayner 2013; Río 2010), these studies also reveal several lessons that can be drawn for resilient and robust policy designs in general and more specifically in the case of highly volatile ones. That is, mixes that emerge over long stretches of time as a result of earlier policy decisions and layering thus often face the situation in which even when the initial logic of a mix may have been clear at the outset, it can gradually transform into a degenerative or incoherent mix over time (Bode 2006; Hacker 2005). These kinds of “unintentional” mixes can be contrasted with “smarter” designs which involve creating new sets of tools specifically intended to overcome or avoid the problems associated with path-dependent layering processes. A key element in such smarter designs involves including procedural tools such as periodic reviews and sunset provisions which can enhance resilience and robustness (Gunningham et al. 1998; Kiss et al. 2013). This is less a concern for how policy mixes might evolve over time in an unintentional fashion as new elements are added to old mixes in successive rounds of policy-making,

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74  Handbook on corruption, ethics and integrity in public administration and how these may be corrected, but more towards the intentional introduction of additional elements into a policy mix either at the outset or in a delayed or stages fashion. In either case the focus is on a process envisioned from the outset, and carried out in a clear and intentional way (Justen et al. 2014; Taeihagh et al. 2013), so that new elements become “locked in” to an initial design (Howlett 2019a). On a substantive level, “robust” policies are those which incorporate some slack, allowing room for adjustments as conditions change. Robust policies, as in the case of a bridge or building, need to be “overdesigned” or “overengineered” in order to allow for a greater range of effective, thus “robust”, responses across contexts and time. This is well illustrated in the case of crisis and disaster management where, in order to be able to survive crises, systems and organizations require redundancy, back-up systems, and a greater use of materials than would normally be necessary for efficiency in a technical sense (Lai 2012). Organizations which are too lean (Radnor and Boaden 2004) may eliminate elements that could be useful when circumstances change, thus restricting the ability of an organization to respond to surprises (Room 2013b). Resilience, on the other hand, requires the ability to alter and adapt policies on the fly – to improvise effectively. This can involve, for example, building into a policy a range of “automatic stabilizers” such as welfare payments or unemployment insurance payments which increase in the event of an economic downturn, maintaining some level of spending and saving despite a general economic contraction or removing some funds from investment availability during boom times (Salamon 2002). Policy designs that contain both a substantive component – a set of alternative arrangements thought to be potentially capable of resolving or addressing some aspect of a policy problem – as well as a procedural component – a set of activities related to maintaining some level of agreement among those charged with formulating, deciding and administering a policy and control over target behavior are more resilient than those which lack them. Ensuring policy robustness and resilience in the face of maliciousness requires the inclusion of procedures which allow responses to surprises – including non-compliance by policy targets – to be improvised and implemented in an effective way as they occur (Room 2013a, 2013b). This includes, for example, built-in policy reviews, and mechanisms for outside evaluation and control including provisions for future public hearings and information access, disclosure and dissemination which allow significant adjustments to changing circumstances to occur (Lang 2016).

NOTE 1. Recognition of this need is in strong opposition to many ideas about policy-making which equate better designs with efficiency, implying the allocation of only the minimum amount of resources possible, and which also often emphasize routinization and the replication of standard operating procedures and program elements in order to ensure consistency in program delivery (Moxey et al. 1999; Cole and Grossman 1999). It requires clearer thinking about what exactly sequencing means, how it occurs in policy-making and how it can best be managed to ensure resilient and robust policies are created and remain in effect.

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Dealing with the dark side of policy-making  75

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7. Corruption of public officials by organised crime: understanding the risks, and exploring the solutions Russell G. Smith, Tony Oberman and Georgina Fuller

INTRODUCTION This chapter examines the involvement of serious and organised crime groups in corrupting public officials. Based on a comprehensive review of international literature, it seeks to identify the nature of organised crime involvement in public-sector corruption, the associated risk factors and best-practice responses and prevention strategies. Corruption affecting the public sector is a covert and pernicious criminal activity that has been defined as: ‘[a] public official… acting for personal gain, [violating] the norms of public office and [harming] the interests of the public to benefit a third party who rewards [the public official] for access to goods or services which [they] would not otherwise obtain’ (Philp 2006: 45). The United Nations Convention Against Corruption does not define corruption (UN 2004a) but instead defines conduct and activities considered to be corrupt, such as bribery of domestic and foreign public officials or officials from international organisations, diversion of public property by public officials and bribery and embezzlement in the private sector (Sharman & Chaikin 2009). Public officials are particularly at risk of being invited to act corruptly because they have access to extensive collections of confidential and personal information, and can provide benefits, or discount liabilities, to members of the public. This makes them attractive to members of organised crime groups as targets of corruption. The United Nations Convention against Transnational Organized Crime outlines the essential components of an organised crime group as being a structured group, comprising three or more persons, existing for a period of time and acting in concert with the aim of committing serious criminal offences in order to obtain some financial or material benefit (UN 2004b). There are a number of dimensions to organised crime involvement in public-sector corruption. Key among these are the patterns of the relationship, or its continuity and whether corruption is sporadic or systemic. Sporadic or isolated incidents of corruption are usually carried out by individuals when an opportunity arises that can be exploited. Sporadic or isolated instances of corruption usually target lower-level actors where organised crime participation is less sophisticated than in longer-running cases. Systemic – or what has been called symbiotic – corruption is usually ongoing and forms part of a pattern of offending by organised crime groups. It involves collective action by group members, even where the leaders are rarely directly involved. Systematic public-sector corruption generally involves more sophisticated groups seeking to minimise the risk of detection by acting in a planned manner. Another dimension concerns the level of the public sector targeted. Buscaglia and van Dijk (2003) identified five levels of public-sector infiltration by organised crime groups. The first 80 Russell G. Smith, Tony Oberman and Georgina Fuller - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:29PM via The University of British Columbia Library

Corruption of public officials by organised crime  81 level involves sporadic acts of bribery or the abuse of public office by organised crime at lower levels of government. The second involves frequent corruption by putting low-ranking state officials on the organised criminal payroll. The third is when organised crime infiltrates the managerial domain of public agencies in an attempt, for example, to bias the hiring of state personnel in order to favour particular criminal groups. The fourth level of infiltration is direct compromise of the heads of agencies responsible for fighting organised crime-related activities such as drug enforcement agencies. Finally, the fifth level entails capture of the state’s policies by criminal groups that are then able to bias lawmaking, law enforcement and judicial decisions. This fifth type of state infiltration often involves high-level officials such as senators, ministers or even presidents (Buscaglia & van Dijk 2003: 23–4). The degree of systematic involvement of organised crime in corruption, and the impetus for this, is the third dimension of public-sector corruption. Corruption may be opportunistic, or it may be strategically planned and developed by organised crime groups. Opportunistic corruption often occurs when there is a motivation for illegal behaviour and the risk of detection is low. Smith (2014), for example, illustrates how individuals, including public officials, are recruited to participate in corrupt activities by organised crime groups. On occasions, public officials may not only facilitate and assist criminal conduct by organised crime, but may actively participate in serious illegality. The European Commission explored this in 2010 and provided examples that included police officers who ran their own prostitution rings or drug-distribution networks, politicians who covertly controlled companies engaged in criminal behaviour and cases where criminals had accumulated sufficient legitimate power to participate directly in local politics – known as state capture (Gounev & Bezlov 2010). Organised crime groups are attracted to public-sector information and services because, in many cases, they permit their illicit activities to remain undetected and beyond the reach of law enforcement. In Australia, for example, in June 2013, the Australian Commission for Law Enforcement Integrity (ACLEI) found that three Australian Customs and Border Protection officials had been involved in the importation of illicit drugs and precursors, by ensuring that drug couriers were not intercepted or screened on arrival at Sydney International Airport and manipulating rosters so that other corrupt officials were present at specific times (ACLEI 2013). In another case in 2009, a New South Wales police analyst was found guilty of passing confidential information to associates who were members of an Outlaw Motor Cycle Gang (OMCG) (Arlington 2010).

PRIOR RESEARCH The relationship between public-sector corruption and organised crime has received considerable attention in Europe and the United States (US) (Gounev & Bezlov 2010; Buscaglia & van Dijk 2003; Holmes 2008; Wang 2013; Transparency International 2010; Muravska, Hughes & Pyman 2011; Savona & Berlusconi 2015). Both Europe and the Americas have had a lengthy history of interventions that have led to the discovery of organised crime group involvement in corruption. In 2002, the United Nations Office on Drugs and Crime (UNODC) commissioned a study of 40 organised criminal groups across 16 countries and one region. The study was conducted by the Centre for International Crime Prevention (CICP) in an attempt both to build the

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82  Handbook on corruption, ethics and integrity in public administration knowledge base on organised crime groups and to develop a comparative framework for studying the phenomenon. The CICP sent detailed questionnaires to a selected number of United Nations member states believed to have the capacity to assist and the information necessary to be useful to the study. Each of the 16 participating countries was asked to complete the questionnaire and provide an analytical overview of the three most prominent organised criminal groups in their country. The use of corruption by the groups studied and the degree of political influence they exerted were two of the relevant variables examined. Regarding corruption, it was found that: In just under half of the groups (18 cases), corruption was essential to the primary activity of the criminal group. In just under one third of the groups (12 cases), the groups made use of corruption occasionally. In the remaining instances (10 cases), there was evidence of little or no corruption. Perhaps most significant is the degree to which, in the overall majority of cases, corruption is a key element for the undertaking of organized crime activities and that three quarters of the groups use corruption occasionally or regularly. (UNODC 2002: 25)

In respect of political influence, it was found that: In just under half of the surveyed groups, respondents regarded there to be no evidence of any political influence. However one third of the groups were said to have political influence at the local or regional level (14 cases). In 7 cases the organized crime groups in question was regarded to have some influence at national level in the country of intervention and in five cases to have some influence in a country or countries outside of the one where the respondent recorded their activities. In only five cases did a respondent regard political influence to cross more than one category, for example, occurring at local regional and national level (1 case) or at a national level and abroad (3 cases) or at all three levels of government (1 case). (UNODC 2002: 26)

Global circumstances have changed considerably in the ensuing years, with the growth of terrorism, the influence of global financial crises, the availability of new technologies and increased human trafficking. In addition, the results only reflect the subjective assessments of the responding agencies in the countries surveyed. Nonetheless, although these results were drawn from a wide range of countries with varying organised crime group problems, they do provide some empirical indication of how these groups used corruption and political influence at the time the report was prepared. In 2003, the UNODC conducted another study to identify and isolate the factors influencing the growth of public-sector corruption involving organised crime (Buscaglia & van Dijk 2003). Qualitative and quantitative information was obtained for a large sample of countries and territories, representing worldwide diversity stratified by levels of socio-economic development. Data on corruption mostly related to the street- and medium-level corruption an average citizen faces in his or her dealings with public agencies, excluding high-level or ‘grand’ corruption. Data on organised crime included indicators of five core activities (trafficking in persons, firearms, stolen cars and cigarettes, as well as fraud) and four secondary factors (costs for business, extent of the informal economy as a proportion of gross domestic product, violence and money laundering). The study’s objective was to explore and verify empirically the links between organised crime and its main economic, administrative, legal/judicial and political causes. Statistical analysis confirmed a very strong association between the index for levels of organised crime and the index for public-sector corruption. ‘The results indicated that independence and

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Corruption of public officials by organised crime  83 integrity of the judiciary was the most important predictor of the extent of organized crime. Independently of this, the extent of organized crime was higher in countries where the police were less effective. Finally, organized crime was more prevalent in less affluent countries, independently of the two other factors’ (Buscaglia & van Dijk 2003: 13). Based on the evidence examined, the study found that organised crime and corruption prosper in an environment of bad governance. It was observed that ‘rampant corruption offers opportunities for organised crime that are readily exploited by emerging criminal groups. When organised crime acquires a dominant position, corruption within the public sector is bound to grow’ (Buscaglia & van Dijk 2003: 22–3). The study also argued that ‘insufficiencies in the area of economic and financial regulation and poor legal-judicial infrastructures are among the many aspects of governance that appear to be relevant to crime control’ (Buscaglia & van Dijk 2003: 32). Research undertaken on behalf of the European Commission has documented the extent of corruption in European nations. Of particular relevance to the present chapter is a study commissioned by the European Commission (2006) that explored the opinions of European Union (EU) citizens on organised cross-border crime and corruption. More than half of the citizens of the EU as a whole believed that most corruption in their country was caused by organised crime (54%). Italy had the highest number of respondents convinced of the link between corruption and organised crime (70%). Two thirds of citizens in Lithuania (67%) and Slovenia (67%) shared that view; on the other hand, the majority of citizens in the Republic of Cyprus (54%), the Czech Republic (52%) and Finland (51%) did not agree that there was a link between corruption and organised crime in their country. In 2010, the European Commission contracted the Centre for the Study of Democracy to analyse the links between organised crime and corruption in much greater depth. The broad objective of this study was to identify and analyse the links between organised crime and corruption, using supporting empirical evidence on the extent of the linkage between the two phenomena in EU member states (Gounev & Bezlov 2010). The study involved statistical and literary analysis, as well as interviews and fieldwork in six countries: the Netherlands, Greece, Italy, Bulgaria, France and Spain. The analysis confirmed the hypothesis that a statistically strong relationship was found to exist between organised crime and corruption. Further analysis revealed that effective government and institutions had an even stronger impact on corruption than on organised crime; effective government institutions also had a strong impact on organised crime levels. The model found a statistically significant relationship between general economic indicators (gross domestic product per capita in Purchasing Power Standards), corruption and organised crime. In addition, the analysis showed that the relationship between money laundering and most types of institutional corruption was very strong. Law-enforcement institutions were most directly affected, while the customs agencies of most EU countries were seriously affected, particularly involving human trafficking. The EU institution least affected by organised crime was the judiciary (Gounev & Bezlov 2010).

AREAS OF RISK What then are the areas of the public sector that are most at risk of corruption by members of organised crime groups?

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84  Handbook on corruption, ethics and integrity in public administration Customs and Border Control Customs agencies of most countries have been found to be seriously affected by organised crime. Research has found that customs officers are more likely to be involved in supporting corrupt channels for consumer goods than in the smuggling of illegal goods like arms and drugs, and that the most typical cross-border criminal networks deal with cigarettes, alcohol, oil and oil products (Gounev & Bezlov 2010). The Centre for the Study of Democracy’s report included numerous examples of organised crime groups being involved in corrupting customs officials in the EU. These included customs officers concealing drug smuggling into London by failing to inspect drug mules properly, or by making payments to a heroin trafficker in return for receipt of information on heroin sales in the United Kingdom (UK); a corrupt customs officer at the Port of Antwerp issuing false documentation in collusion with British alcohol smugglers in which the false certificate stated that the goods had been exported to Belgium, when in fact they were sold illegally in the UK; and a staff member at the Belgian Embassy in Sofia in 1996 issuing 250 visas to Bulgarian nationals, including many prostitutes, in return for payments from organised crime group members who were part of a people-smuggling ring (Gounev & Bezlov 2010). In Australia, the Department of Home Affairs manages Australian border security. The illicit drug market in Australia generates lucrative profits (ACLEI 2013) and the Australian border is a key entry and exit point for importers of illicit drugs and other commodities. In 2011, the department notified the Australian Integrity Commissioner of ten matters concerning corruption within the border force staff, including an allegation that an individual suspected by the Australian Federal Police of importing chemicals used to manufacture methamphetamine and ecstasy was in regular contact with officers at Sydney International Airport. These officers had knowledge of law-enforcement techniques and the vulnerabilities of detection processes. They also had access to the secure areas of the airport, police databases, recruitment information and staffing rosters. The officers collaborated, using their knowledge of airport processes to circumvent surveillance and interdiction systems and assisting in the importation of illicit drugs from Thailand and Vietnam. The resulting police operation, Heritage, led to the confiscation of approximately $273,000 worth of pseudoephedrine, cash and other assets (ACLEI 2013). Human Trafficking A number of studies have documented the nature and extent of the involvement of corrupt public officials in organised human trafficking (see Holmes 2009 for a review of the European situation). Public officials can be directly involved in organised human trafficking by running or consciously participating in trafficking operations or related activities, or indirectly involved by collaborating with persons known or suspected to be victims of trafficking, refusing to investigate allegations of trafficking, supporting legislation that is conducive to trafficking or refusing to pass legislation designed to curb trafficking. Defence and Security Personnel In 2011, Transparency International UK’s Defence and Security programme published an analysis of national defence and security establishments’ vulnerability to organised crime, and

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Corruption of public officials by organised crime  85 the interaction between organised crime and corruption in post-conflict environments. The authors explained that: the erosion and breakdown of governance systems and democratic institutions, whether through violent conflict or political crisis, akin to the collapse of the Soviet Union or the military coup– military dictatorship cycle in Central and South America, enables the direct involvement of national defence and security apparatuses in organised crime. An exacerbating factor is of course that state defence and security forces possess not only a monopoly on, or at least highly privileged access to, the means of violence, confidential information, and influential contacts… [but] the painful transition of post-Communist countries from authoritarian regimes and autarchic economies, also featuring severe economic depression, unemployment, and inflation, was accompanied by the transition of members of the defence, security, and intelligence corps into organised crime. (Muravska et al. 2011: 22)

Prison Officials In the US in January 2016, more than 50 Department of Corrections employees and inmates of Georgia state prisons, together with individuals outside the prison system, were charged with conspiring to commit wire fraud, conspiring to commit money laundering and accepting bribes to smuggle contraband into Georgia prisons. Much of the alleged criminal activity was committed inside Georgia state prisons and initiated by inmates. The offences were committed through the use of mobile phones smuggled into prisons – in many cases with the assistance of corrupt prison officers. It was alleged that, from 2014 to 2015, prison officers seized more than 23,500 mobile phones from inside Georgia state prisons – many with internet access. On a number of occasions the phones were smuggled into prisons by correctional officers or other prison employees. It was also alleged that correctional officers had smuggled other contraband like tobacco products and drugs into prisons, in exchange for bribes. The phones were used within the prisons to run online fraud schemes, that resulted in victims providing funds to associates located outside the prison system (United States Attorney’s Office 2016). Natural Resources Other research has explored the problem of the so-called ‘resource curse’, in which corrupt public officials collaborate with political elites to exploit natural resources such as oil, gas or minerals for personal gain. Global Witness (2012: 2) identified two forms of such corruption: governments not making the rationale for choosing particular companies in the bidding process clear and, in certain cases, appearing to allow some companies special or preferential access to oil licences, and governments awarding oil licences to companies whose beneficial owners remained undisclosed. In certain cases, grounds existed to suspect that some of the companies may have been owned or controlled by government officials or their private-sector proxies. Wildlife A related area of organised crime involvement in corruption concerns wildlife trafficking. The illegal wildlife trade came to prominence in 1998 with Operation Jungle Trade, when the United States customs service and the United States Fish and Wildlife Service uncovered a sophisticated smuggling ring selling illegally obtained animals and birds in several states and in ten other countries throughout the world. The operation resulted in the seizure of 662

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86  Handbook on corruption, ethics and integrity in public administration valuable endangered animals – the birds alone were worth over $600,000 – and the arrest of 40 traffickers and distributors of wildlife. Zimmerman (2003: 1673) noted the high level of organised crime group involvement in these activities including corruption of public officials in central government agencies. Art and Antiquities There is also considerable evidence of organised crime involvement in art and antiquities crime (Hufnagel & Chappell 2019). Chappell and Polk (2011) found evidence of organised crime group involvement in the corruption of public officials to allow the movement, on a large scale, of stolen objects through China, Cambodia and Thailand. However, corruption appears to be located primarily in the supply countries rather than recipient nations. There have been no accounts that we know of corrupt officials concerned with the trade in cultural heritage material in, for example, policing or customs agencies in such developed countries as the United States, the United Kingdom, or Australia… On the other hand, there are several indications of corruption… involving customs, police and military figures in the supply nations… Where there appears to be consistent evidence, impressionistic to be sure, is in the customs services at the key portals where the trade is moved onward to the ultimate supply destinations. (Chappell & Polk 2011: 249–50)

INDIVIDUAL ENABLERS AND RISK FACTORS Over the last 20 years, a number of researchers have attempted to determine the enablers of, and risk factors for, corruption (de Graaf & Huberts 2008). Enablers are those conditions necessary for corruption to occur, while risk factors are conditions that increase the likelihood it will occur. Motivations and Benefits Obtaining financial benefit is one of the most common motivations for public-sector corruption (ACLEI 2011). KPMG’s Global Profiles of the Fraudster (2016) showed that the overriding motivations of fraud and corruption offenders were for personal financial gain and greed (66%). Of the 750 surveyed, there were 125 perpetrators of corruption-type fraud who showed features different from other forms of fraudulent activity. One was that corruption tends to operate at a higher level in a company with 51 percent being executives compared with 31 percent for other types of fraud. Corruption also was concentrated in the office of the chief executive (26% compared with 15% for other types) (KPMG 2016). Other non-financial benefits of corruption include receiving sexual services and increasing one’s sense of status or power (Grabosky & Larmour 2000). ACLEI (2011) also found that corruption may be motivated by conflicts of obligation or misplaced loyalty. Demographics Very little research has focused on the demographic characteristics of individuals who engage in corrupt behaviour. KPMG (2016) report that 79 percent of fraudsters are men, although the

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Corruption of public officials by organised crime  87 proportion of women is increasing. The overwhelming prevalence of male involvement in corruption may be due to the fact that women traditionally have lower rates of offending across all crime types compared with men (AIC 2014) and that men have greater opportunities to offend than women (Torgler & Valev 2004), with men occupying positions of power in organisations where their influence is more sought after by organised crime groups. Alternatively, organised crime groups may seek to target lower-level public officers with decision-making powers who are often women. Torgler and Valev (2004) examined the relationship between age and corruption using data from the World Values Survey. The authors examined the extent to which people accept and justify corrupt behaviour – specifically bribery – and found a strong effect for age, indicating that older populations (those aged 35 years and above) were least likely to condone bribery. They argued that this reflected the general decline in deviant behaviour demonstrated by the age-crime curve and desistance theories (Hirschi & Gottfredson 2000; Torgler & Valev 2004). Aside from age and gender, IBAC (2015) has identified other personal characteristics associated with public-sector employees targeted by organised crime groups. These include immaturity; low self-esteem; amorality and unethical behaviour; being prone to fantasising; impulsiveness; lacking conscientiousness; and manipulative behaviour (IBAC 2015). In addition, IBAC (2015) drew attention to environmental and lifestyle factors, including loss of employment, accidents, personal injury and loneliness, as factors that may leave someone vulnerable to the advances of organised crime groups. Lifestyle Anti-corruption agencies have increasingly focused on lifestyle risk factors to identify vulnerabilities to corruption by organised crime. The use of drugs, including steroids, by public-sector employees is of particular concern. This can occur through employees coming into contact with members of organised crime groups, making them susceptible to blackmail. The use of illicit drugs may also reflect a tendency toward short-term, high-risk behaviour, which may make offers of corruption more attractive (IBAC 2015). ACLEI (2011) noted the use of steroids was of particular concern in organisations like the police, where physical fitness is an integral component of the job. IBAC (2015) also found a rise in the number of investigations of corruption by organised crime groups facilitated by or linked to a public-sector employee’s involvement with gyms, steroid use and body image. Concerns of this nature are partly driven by a shift in OMCG demographics toward younger members with similar interests in fitness (IBAC 2015). Personal Relationships At its heart, the corruption of public-sector employees by organised crime groups involves creating and compromising relationships (IBAC 2015). The relationship between public officials and members of an organised crime group may be opportunistic or longer term, and can be formed through associations with family members, peers or colleagues. IBAC noted that pre-existing relationships may carry a particular risk of public-sector corruption. The strong bonds between family members, friends and members of some communities are ripe for exploitation because employees may feel loyal to, or responsible for, the wellbeing of these individuals (IBAC 2015).

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88  Handbook on corruption, ethics and integrity in public administration Relationships with organised crime groups can also be attractive to former defence personnel, particularly those with mental health problems caused by their military service. A recent Australian media investigation found evidence that former high-ranking defence personnel were joining OMCGs for social and emotional support from other gang members (Willacy 2016). Social Media Recent intelligence assessments and research have identified the risk that organised crime groups could use information posted on social media to identify suitable public-sector targets for corruption. In Australia, ACLEI’s Operation Heritage found that public officials share ‘common demographics, including school links, age and community ties’ with those involved in criminal activity, thus providing opportunities for corruption (ACLEI 2014). IBAC also reported that organised crime groups use social media to recruit individuals to act on their behalf as couriers of drugs or precursor chemicals, and it is therefore logical that they will expand their recruitment activities to target public-sector employees (IBAC 2015). In the US, Operation Newscaster showed how social media could be misused to facilitate public-sector corruption. In 2011, NewsOnAir, a fictitious media company, was established, along with 12 fictitious reporters. The ‘reporters’ created false Facebook, LinkedIn and Twitter profiles to friend more than 2,000 senior US defence and diplomatic officials and collect intelligence for use in targeting government officials in the US and Israel. The group behind the activity was thought to be based in Tehran (iSight Partners 2014). Research conducted for the Canadian Department of Public Safety has explored how organised crime groups use social media to communicate and facilitate their activities (Frank, Cheng & Pun 2011). The study found that many organised crime groups in Canada maintained an online social media presence, using this for ‘intimidation of other gangs and individuals, committing fraud, and gang recruitment. Either by recruitment or gang subculture promotion, social media can be used by criminal organisations to more effectively recruit and grow their operations by reaching out to a wider audience’ (Frank et al. 2011: 17).

ORGANISATIONAL ENABLERS AND RISK FACTORS Organisational enablers of public-sector corruption by organised crime groups can arise from the nature of work that public officials conduct and lack of oversight and awareness of risks. Opportunity One case in the US saw 18 tax assessors arrested in connection with a corrupt scheme that cost the city of New York over $40 million in lost revenue. The assessors had charged illegitimate fees and accepted bribes in return for circumventing controls and reducing property taxes. The investigation found a number of organisational factors that appeared to have contributed to, or facilitated, the assessors’ corruption including a lack of agency oversight due to assessors working autonomously and the complex nature of the property assessment process involved that created opportunities to hide their corruption (Lagunes & Huang 2015). In response, the US Department of Finance instituted organisational reforms, including reducing direct contact

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Corruption of public officials by organised crime  89 between assessors and property owners, requiring assessors to submit financial disclosure forms, and bolstering internal audit processes (Lagunes & Huang 2015). Role within the Agency Not all employees within an agency pose the same risk of corruption, even in high-risk sectors like the police or customs. Some employees have greater power or influence that is attractive and useful to organised crime groups. In Australia, Gorta (2006) surveyed 265 agencies and 584 public-sector employees to determine their understanding of corruption risks. It was found that agencies tended to perform, on average, four high-risk functions relevant to corruption. Larger organisations of more than 1,000 employees reported performing more high-risk functions compared with smaller agencies. The two most common functions, performed by approximately two thirds of the agencies surveyed, were receiving cash payments and regularly dealing with the private sector (Gorta 2006). Oversight The level of agency oversight an official is subject to also varies depending on their role or position. One study noted ‘some public officials and certain types of official transactions are subject to the strictest scrutiny’ (Grabosky & Larmour 2000: 3). ACLEI listed a high level of discretion, and low or ineffective supervision, as the two visible indicators associated with opportunities for corruption (ACLEI 2011). Finally, Goel, Budak and Rajh (2015) noted that increased transparency would make it more likely that offending employees would be caught and sanctioned, and would therefore be less likely to respond to the overtures of organised crime groups. Risk Awareness Combating lack of knowledge is one of the primary aims of anti-corruption agencies. Despite this, IBAC has noted that many of the public-sector agencies consulted were unaware of the threat of corruption. These agencies did not address the threats associated with organised crime groups in their organisational risk assessments and were therefore not prepared to prevent and detect corruption (IBAC 2015). In Gorta’s (2006) study, respondents were asked to identify the main corruption risks facing their organisation and whether they felt they were handling them. Common risks that organisations faced and felt they were handling well included administering organisational funds and/or bank accounts, handling confidential information, procurement and cash handling (Gorta 2006). Other areas that organisations felt were a major risk but were not currently being addressed were the use of email and the internet at work, the use of agency resources, materials and equipment, tendering and contracting for services, record keeping and procurement (Gorta 2006). Although organisations were aware of and able to identify risk factors, they are often unsure how best to address them.

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ADDRESSING THE RISKS Best-Practice Initiatives Many of the initiatives developed to minimise risks of corruption in the public sector generally are applicable to the specific risk of corruption initiated by, or involving, organised crime groups. Although there is limited research that evaluates which commonly used strategies are effective in preventing corruption, a number appear to be successful (McCusker 2006; Larmour & Wolanin 2001; Graycar & Smith 2011; Hatchard 2014). A number of initiatives have been developed to deal with the specific risks of organised crime group involvement in the corruption of public officials. The UNODC made one of the earliest attempts to develop a quantitative and qualitative basis for developing response strategies. These included enacting legislative reforms, establishing specialised units against organised crime within the police or judiciary, establishing task forces within the criminal justice system, improving resources for criminal justice administration, building public confidence and trust in the criminal justice system through the involvement of civil society, enhancing judicial independence and changing economic and financial policies to make corruption less attractive to organised crime (Buscaglia & van Dijk 2003: 23–4). Situational Approaches Graycar and Sidebottom (2012) argued that corruption is similar to other forms of crime and, therefore, by ‘increasing the perceived effort of crime, increasing the perceived risks, reducing the anticipated rewards and removing excuses for crime, the opportunities for corruption may be eliminated or reduced’ (Graycar & Sidebottom 2012: 396). Another approach to crime prevention that has been applied in the context of preventing corruption within the public sector involves the use of crime scripts analysis and the 5Is framework developed by Paul Ekblom (2011). This approach provides crime-prevention practitioners with an evidence-based framework and methodology for implementing a range of situational and offender-oriented crime-prevention methods. This was used by Rowe, Akman, Smith and Tomison (2013) to respond to corruption risks arising from tactical displacement, in which organised crime groups target public servants to obtain strategic intelligence to help them avoid detection and arrest. Rowe et al. (2013) applied the principles of crime script analysis, as developed by Cornish (1994), and Ekblom’s 5Is approach to crime reduction to prevent corruption in police and intelligence agencies. Caneppele and Martocchia (2014) also used crime scripts analysis to understand how Italian mafias are involved in corruption related to public procurement and public works in southern Italy. The research was based on an analysis of 18 Italian judicial cases in Sicily, Calabria, Apulia, Basilicata and Campania. The various stages of the contract-tendering process were examined to determine how the mafia infiltrated public procurement processes. The mafia were found to infiltrate the preliminary stages of tendering by using apparently ‘clean’ companies as fronts during the tender process to evade anti-mafia controls. They did this passively (parasitic infiltration) by requiring the payment of a percentage of the contract amount as pizzo (protection money). They also bribed companies to assist them in winning tenders. The authors recommended addressing such risks by crime-proofing legislation. The assumption is that legislation can be criminogenic: the complexity of rules, the presence of overlapping or

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Corruption of public officials by organised crime  91 gaps in the law, as well as specific provisions of law, can become unintentionally vulnerability factors (Caneppele & Martocchia 2014: 298). Another innovative response to procurement corruption involves what Ware, Moss, Campos and Noone (2011) call Corruption Vulnerability Assessments (CVA). These are environmental impact assessments that aim to identify risks of corruption prior to the commencement of public works programmes. The concept was explained as follows: Like an environmental impact assessment, a CVA can be conducted prior to the onset of large developmental projects involving public procurement. A CVA is an intelligence driven assessment that would determine the likelihood of corruption occurring in a planned project. It would examine the environment in a particular country in terms of corruption vulnerabilities that might put funds at risk prior to the onset of distribution. Upon its completion, project designers and international financial institutions would have more information upon which to take graduated measures to ensure that public money is used for the intended purposes. For example, if government officials or their families have widespread holdings in private companies, a mandatory financial disclosure programme can be installed to ensure that officials do not steer contracts to their own business entities. If project monitors are active in a project, the results of the CVA will provide critical information for the monitor to use in tailoring their monitoring protocol. (Ware et al. 2011: 105)

Employee-Vetting Procedures The deliberate withholding of information by an employee, beginning during recruitment or security assessment and continuing once the employee is hired, is referred to as ‘the enduring lie’ (ACLEI 2014). When employees keep secrets from their employer, they become vulnerable to blackmail and extortion (ACLEI 2014). Agencies vet employees to mitigate the individual risk factors as arising from inappropriate relationships or lifestyle factors. Screening allows potential employees to declare associations that may leave them vulnerable to corruption by organised crime groups. By vetting individuals during recruitment, vetting agencies seek to ensure that employees are suitable to access information and will comply with acceptable standards for information management (AGSVA 2015). Unfortunately, security-vetting procedures are not an absolute answer to corruption and criminality. In Australia, for example, the Australian Institute of Criminology’s annual censuses of internal fraud within Commonwealth entities (Jorna & Smith 2019) have found a number of individuals who have perpetrated serious fraud had been security vetted, even at the highest levels. In 2018, the Commonwealth revised its Protective Security Policy Framework that now requires ongoing assessment of personnel concerning security risks (Attorney-General’s Department 2018). It remains to be seen if this will address future risks of corruption among public officials. Codes of Conduct Codes of conduct are sets of rules or principles that outline what is expected of an organisation’s employees (Gordon & Miyake 2001). The UNODC’s model code of conduct for civil servants is one example (UN 2004a). Well-defined organisational values can help to build and sustain corruption resistance and codes of conduct move the focus away from a ‘few bad apples’ and place the emphasis on ethical practice as a way to fight corruption (Gorta 2006;

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92  Handbook on corruption, ethics and integrity in public administration Moss 2013). Generally, codes of conduct will only be effective in reducing corruption when they form part of a broader ethics programme implemented across organisations. Two studies that have explored how effective codes of conduct are in dealing with corruption have found mixed results (Beeri, Dayan, Vigoda-Gadot & Wener 2012; Cleek & Leonard 1998; Garcia-Sanchez, Rodriguez-Dominguez & Gallego-Alvarez 2011). In the first study, a range of publicly available administrative data relating to 154 developing and developed countries were sorted into two groups – countries with a public service code of ethics and those with none (Garcia-Sanchez et al. 2011). The data included information on a range of organisational variables and the country’s corruption level was measured by the public perception of the degree to which public power was exerted for individual gain. Multivariate data analysis found that the existence of a code of ethics did not independently predict the level of corruption in developed or developing nations, when all other factors considered were constant. Only two factors had an independent impact on corruption levels in developed nations – the government's ideology and its stability. In the second study, Beeri et al. (2012) found evidence that ethics programmes had some impact on corruption at the local government level. The authors surveyed 108 employees of a regional council in Israel both before, and after, the implementation of an ethics programme. Twelve months after the ethics programme was implemented, surveyed staff reported that the ethical climate of the council had improved significantly, suggesting that the ethics programme may have had a positive impact on the perceived level of council corruption. However, awareness of the code of ethics did not have any impact on staff perceptions of their organisation’s general ethical climate. Beeri et al. (2012) explained this by suggesting that codes may not be effective when implemented in isolation, but should be delivered as part of a broader programme of activities aimed at preventing corruption and other unethical conduct. Enhanced Auditing and Accountability Practices Financial auditing is another way in which agencies can improve accountability and employee oversight. Dye (2007: 8) argued that auditing is useful in combating corruption risks within agencies, stating that ‘good financial reporting and auditing help reduce the misrepresentation that hides fraudulent operations and misleads the reader’. The study by Lagunes and Huang (2015) in New York found that improved financial auditing of employees, including the introduction of a requirement to submit bank statements, made it more difficult for employees to receive bribes or other financial benefits. The New York Department of Investigation (DOI) operates under a charter that ‘empowers the Department to investigate anything that might be fraudulent, corrupt or wasteful in City government’ (Hearn 2011: 466). The DOI has a comprehensive strategy to disrupt and identify corruption and ensure lasting systematic change in the agency’s culture, policy and practice, to impede future corruption. This strategy encompasses two broad core functions: investigation and education. The DOI also identifies organisational vulnerabilities that could promote corruption and mitigate them. Finally, the DOI monitors projects that may be susceptible to corruption. In some cases, this has involved assigning a DOI employee to the project to monitor it directly and report back to the DOI. Hearn (2011) reported that tips from monitors have led to successful investigations of suspected corruption practices and subsequent arrests.

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Corruption of public officials by organised crime  93 Addressing Social Media Risks The risk of organised crime groups using social media to identify and groom public officials for corruption can be addressed in a number of ways. Public officials need to be made aware of the risks they face from social media and educated in how to minimise them. Policies on the use of social media, such as that of the New South Wales Police Force (2011), can provide effective models. Arguably, a willingness to adhere to social media policies should be a requirement of obtaining a security clearance. It may also be necessary to monitor staff use of social media regularly to detect potential red flags for corruption and to implement measures to limit the ability of staff to engage in high-risk activities online. In particular, it might be necessary to limit the posting of strategically important agency information on social media. Staff should also use social media sites securely, with appropriate security and privacy settings. Ideally, personal and official use of social media should be separate, and regular risk assessments should be undertaken.

CONCLUSIONS A number of areas of the public sector appear to be particularly at risk of corruption by members of organised crime groups. These include procurement, particularly in defence, construction, planning and development and in the frontline agencies of police, customs and border protection and other regulatory bodies. These agencies have extensive personal data holdings and perform decision-making functions of value to organised crime groups. In addition, agencies that manage border security in connection with illegal migration and the movement of illicit substances across borders are particularly at risk as well as new or ‘boutique’ agencies that have yet to establish, implement or monitor effective anti-corruption policies and practices. Public-sector corruption by organised crime groups is also driven by individual factors such as demographic and lifestyle characteristics, as well as the organisational environment in which they operate. In these areas, particular risks arise from financial strain caused by excessive lifestyle expenses or addictive behaviours such as drug abuse or gambling and the failure to differentiate between workplace and private activities, particularly through blended recreational activities and the use of social media. In addition, individual characteristics including youth and naivety, older age and disenchantment with the workplace, social isolation and lifestyle interests that coincide with the interests of members of organised crime groups such as motorcycles, personal fitness, tattooing and excessive alcohol and drug use, create serious risks of corruption taking place. Personal and familial relationship with individuals associated with organised crime groups can also provide opportunities for public officials to act corruptly in order to maintain such relationships. Finally, fiscal demands on the public sector and the economic pressure to reduce government staff numbers, which can give rise to stress, dissatisfaction, disillusionment or resentment among workers, may make them vulnerable to corrupt approaches from members of organised crime groups. Many of the initiatives developed to minimise risks of corruption in the public sector generally can be applied to the specific risks of corruption initiated by, or involving, organised crime groups. Generally, research has found that macro-level measures that seek to reduce

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94  Handbook on corruption, ethics and integrity in public administration incentives and opportunities for corruption are most likely to be effective in reducing criminality. Conventional anti-corruption approaches such as employee security vetting, staff education and the implementation of codes of conduct are of limited benefit in addressing the specific risks associated with organised crime group involvement in public-sector corruption. Enhanced accountability, transparency and oversight, however, are likely to be beneficial. Finally, the use of CVA may be effective in identifying risks of corruption before public works programmes commence.

ACKNOWLEDGEMENTS This chapter is based on research originally undertaken by the authors for the Australian Institute of Criminology and is included in this volume with the permission of the Institute. The findings have been revised and adapted for the present volume. The views expressed do not necessarily reflect the policy position of the Australian government.

REFERENCES URLs correct at 1 November 2019. Arlington, K. (2010), ‘Analyst took reports to bikies, court told’, Sydney Morning Herald, 31 August. www​.smh​.com​.au/​nsw/​analyst​-took​-reports​-to​-bikies​-court​-told​-20100830​-147ec​.html Attorney-General’s Department (AGD) (2018), Protective Security Policy Framework, Canberra: AGD. www​.protectivesecurity​.gov​.au/​Pages/​default​.aspx. Australian Commission for Law Enforcement Integrity (ACLEI) (2011), Annual Report 2010–11, Canberra: ACLEI. Australian Commission for Law Enforcement Integrity (ACLEI) (2013), Investigation Report 02/2013: Operation Heritage (interim report): A joint investigation of alleged corrupt conduct among officers of the Australian Customs and Border Protection Service at Sydney International Airport, Canberra: ACLEI. Australian Commission for Law Enforcement Integrity (ACLEI) (2014), Annual Report 2013–14, Canberra: ACLEI. Australian Government Security Vetting Agency (AGSVA) (2015), ‘Getting a clearance’, www​.defence​ .gov​.au/​AGSVA/​Getting​-a​-clearance​.asp Australian Institute of Criminology (AIC) (2014), Australian Crime: Facts and Figures 2013, Canberra: AIC. http://​aic​.gov​.au/​publications/​current​%20series/​facts/​1​-20/​2013​.html Beeri, I., Dayan, R., Vigoda-Gadot, E. & Wener, S. (2012), ‘Advancing ethics in public organizations: the impact of an ethics program on employees’ perceptions and behaviors in a regional council’, Journal of Business Ethics, 112: 59–78. Buscaglia, E. & van Dijk, J. (2003), ‘Controlling organized crime and corruption in the public sector’, Forum on Crime and Society, 3(1–2): 3–34. Caneppele, S. & Martocchia, S. (2014), ‘Italian mafias, public procurement and public works in southern Italy’, in Caneppele, S. & Calderoni, F. (eds), Organized Crime, Corruption and Crime Prevention, New York: Springer International, pp. 293–9. Chappell, D. & Polk, K. (2011), ‘Corrupt practices in the global trade in art and antiquities’, in Graycar, A. & Smith, R.G. (eds), Handbook of Global Research and Practice in Corruption, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, pp. 241–54. Cleek, M.A. & Leonard, S.L. (1998), ‘Can corporate codes of ethics influence behavior?’ Journal of Business Ethics, 17(6): 619–30.

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Corruption of public officials by organised crime  95 Cornish, D.B. (1994), ‘The procedural analysis of offending and its relevance for situational prevention’, in Clarke, R.V. (ed.), Crime Prevention Studies, Vol. 3, Monsey, NY: Criminal Justice Press, pp. 151–96. de Graaf, G. & Huberts, L.W.J.C. (2008), ‘Portraying the nature of corruption using an explorative case study design’, Public Administration Review, 68(4): 640–53. Dye, K.M. (2007), ‘Corruption and fraud detection by public sector auditors’, EDP Audit Control and Security Newsletter, 36(5–6), 6–15. Ekblom, P. (2011), Crime Prevention, Security and Community Safety Using the 5Is Framework, Basingstoke: Palgrave Macmillan. European Commission (2006), Special Eurobarometer: Opinions on Organised, Cross-border Crime and Corruption, no. 245, Brussels: European Commission, Directorate-General for Home Affairs, http://​ec​.europa​.eu/​COMMFrontOffice/​PublicOpinion/​index​.cfm/​Survey/​getSurveyDetail/​search/​ corruption/​surveyKy/​1490 Frank, R., Cheng, C. & Pun, V. (2011), Social Media Sites: New Fora for Criminal, Communication, and Investigation Opportunities, Report no. 021, Ottawa: Public Safety Canada. Garcia-Sanchez, I.M., Rodriguez-Dominguez, L. & Gallego-Alvarez, I. (2011), ‘Effectiveness of ethics codes in the public sphere: are they useful in controlling corruption?’ International Journal of Public Administration, 34: 190–5. Global Witness (2012), ‘Rigged? The scramble for Africa’s oil, gas and minerals’, London: Global Witness. www​.globalwitness​.org/​en/​reports/​rigged/​ Goel, R.K., Budak, J. & Rajh, E. (2015), ‘Private sector bribery and effectiveness of anticorruption policies’, Applied Economics Letters, 22(10): 759–66. Gordon, K. & Miyake, M. (2001), ‘Business approaches to combating bribery: a study of codes of conduct’, Journal of Business Ethics, 34: 161–73. Gorta, A. (2006), ‘Corruption risk areas and corruption resistance’, in Sampford, C., Shacklock, A., Connors, C. & Galtung, F. (eds), Measuring Corruption, Aldershot: Ashgate Publishing, pp. 203–20. Gounev, P. & Bezlov, T. (2010), Examining the Links between Organised Crime and Corruption, Brussels: European Commission and Centre for the Study of Democracy. Grabosky, P. & Larmour, P. (2000), ‘Public sector corruption and its control’, Trends and Issues in Crime and Criminal Justice, No. 143, Canberra: Australian Institute of Criminology. Graycar, A. & Sidebottom, A. (2012), ‘Corruption and control: a corruption reduction approach’, Journal of Financial Crime, 19(4): 384–99. Graycar, A. & Smith, R.G. (eds) (2011), Handbook of Global Research and Practice in Corruption, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing. Hatchard, J. (2014), Combating Corruption: Legal Approaches to Supporting Good Governance and Integrity in Africa, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing. Hearn, R.G. (2011), ‘The role of education in changing corrupt practices’, in Graycar, A. & Smith, R.G. (eds), Handbook of Global Research and Practice in Corruption, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, pp. 463–82. Hirschi, T. & Gottfredson, M. (2000), ‘Age and the explanation of crime’, in Crutchfield, G., Bridges, S., Weis, J. & Kubrin, C. (eds), Crime Readings, Thousand Oaks, CA: Pine Forge Press, pp. 138–42. Holmes, L. (2008), ‘Corruption and organised crime in Putin’s Russia’, Europe-Asia Studies, 60(6): 1011–31. Holmes, L. (2009), ‘Human trafficking and corruption: triple victimisation?’, in Friesendorf, C. (ed.), Strategies against Human Trafficking: The Role of the Security Sector, Vienna: National Defence Academy and Austrian Ministry of Defence and Sports, pp. 83–114. www​.dcaf​.ch/​content/​download/​ 36920/​529057/​file/​Chapter​%202​.pdf Hufnagel, S. & Chappell, D. (2019) (eds), The Palgrave Handbook on Art Crime, London: Palgrave Macmillan. Independent Broad-Based Anti-Corruption Commission (IBAC) (2015), Organised crime group cultivation of public sector employees, Intelligence Report, no. 1, Melbourne: IBAC. iSight Partners (2014), Newscaster: An Iranian Threat within Social Networks, Dallas, TX: iSight Partners. www​.isightpartners​.com/​2014/​05/​newscaster​-great​-case​-cyber​-threat​-intelligence/​ Jorna, P. & Smith, R.G. (2019), ‘Commonwealth fraud investigations, 2016–17’, Statistical Report, no. 15, Canberra: Australian Institute of Criminology.

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96  Handbook on corruption, ethics and integrity in public administration KPMG (2016), Global Profiles of the Fraudster: Technology and Weak Controls Fuel the Fraud, Sydney: KPMG. www​.kpmg​.com/​global/​en/​issuesandinsights/​articlespublications/​global​-profiles​-of​ -the​-fraudster/​pages/​default​.aspx Lagunes, P. & Huang, R. (2015), ‘Saving Gotham: fighting corruption in New York City’s property tax system’, in Rose-Ackerman, S. & Lagunes, P. (eds), Greed, Corruption, and the Modern State, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, pp. 180–205. Larmour, P. & Wolanin, N. (eds) (2001), Corruption and Anti-Corruption, Canberra: Asia-Pacific Press. McCusker, R. (2006), ‘Review of anti-corruption strategies’, Technical and Background Paper, no. 23, Canberra: Australian Institute of Criminology. Moss, P. (2013), The Corruptor and the Corrupted: Examining the Link between Organised Crime and Law Enforcement Corruption, paper presented to the International Serious and Organised Crime Conference, Brisbane, 29 July. Muravska, J., Hughes, W. & Pyman, M. (2011), Organised Crime, Corruption, and the Vulnerability of Defence and Security Forces, London: Transparency International United Kingdom. New South Wales Police Force (2011), Personal Use of Social Media Policy and Guidelines, Sydney: New South Wales Police Force. Philp, M. (2006), ‘Corruption definition and measurement’, in Sampford, C., Shacklock, A., Connors, C. & Galtung, F. (eds), Measuring Corruption, Aldershot: Ashgate Publishing, pp. 45–56. Rowe, E., Akman, T., Smith, R. & Tomison, A. (2013), ‘Organised crime and public sector corruption: a crime scripts analysis of tactical displacement risks’, Trends and Issues in Crime and Criminal Justice, no. 444, Canberra: Australian Institute of Criminology. Savona, E.U. & Berlusconi, G. (eds) (2015), Organized Crime Infiltration of Legitimate Businesses in Europe: A Pilot Project in Five European Countries, Trento: Transcrime–Università degli Studi di Trento. Sharman, J.C. & Chaikin, D.A. (2009), ‘Corruption and anti-money laundering systems: putting a luxury good to work’, Governance: An International Journal of Policy, Administration, and Institutions, 22(1): 27–45. Smith, R.G. (2014), ‘Responding to organised crime through intervention in recruitment pathways’, Trends and Issues in Crime and Criminal Justice, no. 473, Canberra: Australian Institute of Criminology. Torgler, B. & Valev, N.T. (2004), Corruption and Age, Working Paper no. 2004-24, Basel: Centre for Research in Economics, Management and the Arts. Transparency International (2010), Corruption and Public Procurement, Working Paper 05/2010, Berlin: Transparency International. United Nations (UN) (2004a), United Nations Convention against Transitional Organized Crime and the Protocols thereto, New York: United Nations. www​.unodc​.org/​documents/​treaties/UNTOC/ Publications/TOC%20 Convention/TOCebook-e.pdf United Nations (UN) (2004b), United Nations Convention against Corruption, New York: United Nations. www​.unodc​.org/​documents/​ treaties/UNCAC/Publications/Convention/08- 50026_E.pdf United Nations Office on Drugs and Crime (UNODC) (2002), Results of a Pilot Survey of Forty Selected Organized Criminal Groups in Sixteen Countries, Vienna: UNODC. United States Attorney’s Office (2016), ‘More than 50 individuals charged in massive corruption, fraud and money laundering schemes operated from inside Georgia state prisons’, Justice News, Northern District of Georgia, 21 January. www​.justice​.gov/​usao​-ndga/​pr/​more​-50​-individuals​-charged​-massive​ -corruption​-fraud​-and​-money​-laundering​-schemes Wang, P. (2013), ‘The rise of the Red Mafia in China: a case study of organised crime and corruption in Chongqing’, Trends in Organised Crime, 16: 49–73. Ware, G.T., Moss, S., Campos, J.E. & Noone, G.P. (2011), ‘Corruption in procurement’, in Graycar, A. & Smith, R.G. (eds), Handbook of Global Research and Practice in Corruption, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, pp. 65–121. Willacy, M. (2016), ‘Highly decorated former Army officer suspected of being senior Bandidos bikie club leader’, ABC News, 17 February. www​.abc​.net​.au/​news/​2016​-02​-17/​decorated​-former​-army​ -officer​-suspected​-of​-joining​-bikie​-gang/​7175682 Zimmerman, M.E. (2003), ‘The black market for wildlife: combating transnational organized crime in the illegal wildlife trade’, Vanderbilt Journal of Transnational Law, 36: 1657–89.

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8. Redefining sectors: a more focussed approach to tackling corruption Mark Pyman

INTRODUCTION This chapter describes a different approach to tackling corruption problems, grounded in ‘sectors’ rather than in public administration and national-level approaches. Reforms are more likely to get traction when there is an identifiable community – like within a sector – who will adapt generalised reforms to the particular circumstances of their profession and their sector. A sector approach also enables anti-corruption efforts to be framed as one of the means to achieving desired reforms within any given sector, rather than as a stand-alone ‘corruption benefit’. The broader political and social environment will always be relevant, but by starting with the sector as the prime element of context – in all its functional, cultural and political detail – practitioners can thereby advance the depth of their analysis and plans. Showing that reform is possible in one or two sectors also puts competitive pressure on the ministries that don’t reform. This approach has the potential to open up a huge resource of sector-based competence, shared knowledge and personal motivation. Whilst making the case for sector approaches, this is not to say that the other approaches are not needed. Civil service, judicial or fiduciary reforms may well be slower, messier and less likely to succeed. But that can also mean that you need to have a two-handed strategy, encouraging sectoral reformers to push ahead and be pioneers, while the others are not let off the hook. For example, a health ministry reform will reach the boundary where general administrative weaknesses, such as lack of budgetary transparency or civil service recruitment constraints, limits their reform effort. Each sector is defined broadly, both nationally and internationally. Nationally, it incorporates the relevant ministry, other related public agencies and entities, the local commercial companies functioning in that sector, the sector professionals and their professional bodies, sector regulators, sector oversight bodies and civil society organisations in the sector. Internationally it comprises the global community of professionals in that sector, the international companies operating in the sector and multilateral sector organisations (for example, the World Health Organization (WHO) in the health sector). The international organisations, both government and corporate, are considered as having a responsibility to contribute towards curbing corruption in the sector. Each application in a country uses a problem-driven approach, starting from a set of usual sector-specific corruption issues, with extensive discussion to identify which of the problems can realistically be tackled and to put forward options for reform strategies. This approach is for professionals and citizens who want to solve their own problems: doctors and patients that want to fix health corruption, engineers that want to fix construction corruption, police and citizens who want to fix police-sector corruption. Yes, they need help – hence the need for expertise and initiatives across the sector. Yes, it’s partial, because this 98 Mark Pyman - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:31PM via The University of British Columbia Library

Redefining sectors  99 approach does not promise to solve corruption either across the whole sector or across government, but that’s the nature of incremental change. It will also not work where there is zero energy for reform. On the other hand, disaggregating and choosing the sector corruption issues to tackle allows a measured approach to pick off problems as they can be feasibly tackled. Sector strategies also have a place as the anchor of national anti-corruption strategies, as the United Kingdom has done recently (HMG 2017). Here’s a recent experience that is illustrative of a typical sector, health. It is a summer’s day in 2018 and I am sitting opposite the minister for health in a mid-sized, developed Organisation for Economic Co-operation and Development (OECD) country. Everyone in that room is familiar with the corruption in the country’s health system. We have a good disaggregation of the corruption issues, an essential pre-condition for action (Heywood 2017). We have a thorough understanding of the all-important context: the daily experiences of citizens, the political interests that impinge on health, the professional interests of doctors and other trade bodies, the commercial interests of medical device manufacturers, the behaviour of regional authorities seeking preferential health facilities and the dynamics of politics at the national level. In short, the analytical and contextual work has all been done. There is readiness and capability to take action and there is political will, with the minister really wanting to improve the performance of the health sector and the prime minister strongly supportive. On the minus side, much needed civil service reform is hopelessly stalled in Parliament, the judicial system is constrained by a process that allows ten years of appeals and the major stakeholder groups, notably the doctors, the medical device manufacturers and the regional mayors, are politically more influential than the minister. Any single group of these could be challenged, but the likelihood of success against them is low. Within the health system there are multiple staff communities whose interests are not served by reform, even if only because of the burden of additional work, and they are experienced in resisting reform. After much discussion of the 30 or so health corruption issues, the most realistic strategy seems to be a two-part one. First, to show the seriousness of intent by tackling two very public corruption issues – patients who are waiting for an operation jump the queue by bribing the surgeon, and doctors who claim to be available in the hospital but who are away at private practice. Second, to tackle a narrow set of necessary structural improvements: simplified management information, medicine stock management, introduction of clinical auditing and stronger controls over outside health agencies. This scenario has many positive aspects – the energy of the officials, the step-by-step approach, the realism at what can/cannot be solved and the active involvement of the sector regulators; certainly, more than situations where most of those in power are directly benefitting from the corruption. The story nonetheless shows up three features often overlooked in anti-corruption proposals: (1) those responsible have a very good understanding of the context, they do not need any more analysis; (2) the discussion was fruitful largely because there was a strong underlying structure (the typology of health corruption issues); and (3) getting to a conclusion on the preferred strategy is a messy, detailed, political discussion of multiple options and no easy preferences. The story also reinforces a widely learnt lesson about bureaucracies: they are remarkably hard to change. Evidence across many sectors and countries shows that 70 per cent of all efforts to change organisations fail (e.g. Deloitte 2013).

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SECTORS: DEFINING THE FUNCTIONS AND STRUCTURES OF NATIONAL LIFE Sectors are defined as the individual structures and functions through which national life operates. Structures include the legislature, the judiciary and the civil service. Functions include public functions, such as health, education, policing and public financial management; economic functions, such as agriculture, telecommunications, mining, construction and shipping; and the multiple public–private functions that span both public and private, such as sport, infrastructure projects, tourism and land management (Heywood and Pyman 2018). A sector comprises some or all of the following: one or more professions; a government ministry; multiple government organisations and agencies; multiple commercial organisations and the relevant industry associations; one or more multilateral organisations concerned with international application; and a functional or market regulatory authority. This is a deliberately broad definition, broader than the earlier proponents of sector-based corruption reform (e.g. Spector 2005; Campos and Pradhan 2007) and broader than economist definitions. This type of broad sectoral approach is intended to be more detailed than national-level approaches, yet broader than defining the sector as the relevant government ministry. It is intended to respond to the sector focus proposed a decade ago by Mushtaq Khan: ‘For this reason, a study of interdependence should focus on specific sectoral questions because interdependencies at a very broad level of aggregation often do not have clear policy responses. At the highest level of aggregation (the developing country as a whole), there are so many interdependent institutions and governance capabilities that are either weak or dysfunctional that policy effectiveness would require too many difficult problems to be simultaneously fixed’ (Khan et al. 2010, p. 10).

Professions and Professional Associations There is great functional complexity and correspondingly deep professional expertise in each of the structures and functions of modern life. This is a core reason why one of the approaches to reducing corruption needs to be at sector level. The technical issues and the incentive structures in each sector are quite different, meaning that the safeguards and controls against corruption are likely to be largely different between sectors. Hidden therein is also a huge advantage to the sector approach: this approach allows a direct appeal to the involvement of the particular professions involved in the sector – engineers, doctors, nurses, judges, architects, and so forth – to help with fixing the problems, and to work with their pride and professionalism. Such pride can be a major motivator of reform, however corrupt the environment (Pyman 2017). However, in other situations, the professions and their professional associations will be the principal opponents of corruption reform; the doctors in the health ministry story discussed above, for example. This does not invalidate the importance of working with the professions – large groups usually comprise groups with very different views – but it does serve as a reminder of the necessity of a nuanced understanding of where the support is.

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Redefining sectors  101 Government Organisations, Commercial Organisations and the Relevant Industry Associations Today, almost every area of national life includes public elements, private elements and regulatory elements. For sure, some areas may be largely public (such as taxation and policing) whilst others may be largely private (such as fisheries or tourism), but the co-mingling of public and private is central to most areas of public policy today. However, this binary division into private and public sectors has persisted. For example, the formulation by Jeremy Pope (2000) of TI of the influential National Integrity System identified 11 pillars of integrity: legislature, executive, judiciary, auditor-general, ombudsman, watchdog agencies, public service, media, civil society, private sector, international actors (expanded to 13 pillars in 2012 with the inclusion of law enforcement agency and electoral management body). This holistic concept of an integrity framework was advanced for its time and is again a current concept today (OECD 2017). However, the pillars were unbalanced, with a bias towards control/monitoring and away from effective functioning of mainstream institutions. This bias perhaps reflects a particular perspective on corruption and business, in which the dominant reform concept is that of controlling bad behaviour, rather than of improving the effectiveness of organisations: this perspective might have come from the influence of lawyers, journalists and civil society in the initial development of the corruption narrative. Multilateral Organisations and International Dimensions Many sectors have international bodies that have expertise which is available for use by its member states and to support them in their decision making: health has WHO and customs has the World Customs Organization, for example. These multinational organisations have the potential to play a major role in working internationally with governments and companies in the sector to reduce corruption. Some are active in this role, others are not. Some have global controlling authority over the sector, such as the International Civil Aviation Organization, whilst others are primarily representative, such as the International Maritime Organization in shipping. Besides working with these institutions, reform almost always has international dimensions. There is a need to exchange knowledge about international companies in order to understand their strengths and vulnerabilities. Proceeds of corruption are increasingly laundered internationally. Government Ministry and Regulatory Authority Though it is not a formal part of the definition that a sector should have its own ministry and minister, nor that it should have a regulatory authority, most sectors in a country are likely to have both. The ministry, through the formal leadership of the minister, has major roles to play in seeking to understand corruption risks and working to prevent and control corruption. The regulatory authority has great scope to be active in controlling corruption, separate from any anti-corruption agency. Finally, the political environment and the nature of the polity is of course a major factor in influencing corruption reform, but it does not define the sector. The fundamental Montesquieu division of a modern state between the executive, the legislature and the judiciary may or may

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102  Handbook on corruption, ethics and integrity in public administration not be reflected in practice, but for the purpose of corruption reform we think of each of these as just separate sectors with their own weaknesses and vulnerabilities. A Working List of Sectors Figure 8.1 lists a working list of 60 individual structures and functions through which national life operates, relevant for corruption reform (CurbingCorruption 2019a). The list has been grouped for ease of reference into a number of functional categories. Clearly no list can be definitive, and the 60 listed in Figure 8.1 are above all a pragmatic selection. In addition, three major activities – civil service, public procurement and local government – do not fit neatly into the sector definition. For now, they are listed here as ‘horizontal sectors’ because, though not naturally sectors, they form discrete activities and form the traditional backbone of public administration. Having clarified the sector, the next step is to provide much greater clarity and uniformity on what are the ‘corruption issues’ in the sector.

Note: Each sector comprises some or all of the following: ministry, government organisations and agencies; commercial organisations, relevant industry and professional associations; sector-related international and multilateral organisations; functional or market regulatory authority; sector professions.

Figure 8.1

A working list of sectors

IDENTIFYING THE BASE SET OF SECTOR CORRUPTION ISSUES People use a variety of terms for corruption problems, largely interchangeably. Common ones are corruption issue, corruption problem, corruption type, corruption vulnerability, corruption threat and corruption risk. In general, people use the variants containing ‘vulnerability’, ‘threat’ and ‘risk’ to point to possible manifestations as opposed to actual occurrence of corruption, or sometimes as more palatable synonyms. In this chapter we use the term ‘corruption issue’, meaning a systemic, regulatory, institutional or other weakness that creates opportunities for corruption to occur, and regard all six terms as synonyms.

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Redefining sectors  103 Identifying and Codifying the Sector Corruption Issues The core ‘content’ of the sector-specific approach lies in identifying the full range of corruption issues in that sector. That these are markedly different from one another is illustrated in a nice analogy from Rothstein and Varraich (2017, p. 45): ‘Biologists classify hummingbirds, hens, eagles and ostriches all as “birds” despite the fact that they are, to say the least, quite different birds.’ For example, in the defence sector, Transparency International defines 29 distinct corruption issues (Pyman 2017). Through discussions with military officers, ministry staff, academics and civil society in multiple countries over several years, the list of issues had become stable, even across very different national and political environments. One way to make the first cut of the sector or sub-sector typology is to identify the likely sector corruption issues within each of the basic sub-categories of policy, finance, human resources, procurement and operations. The number of issues can at this point be as large as it comes out to be. Then you can consider if some other set of system sub-categories for that sector (like the ones from WHO, discussed above) might be more useful than the basic sub-categories. Third, read the literature to see who else has outlined corruption issues for this sector/sub-sector and merge them with your list; and, finally, bring the number of issues down to between 20 and 50. There could, of course, be an infinite number of corruption issues, disaggregated endlessly. The author has found, however, that in practice having a list of issues that fits easily and legibly on a single page is a powerful way to stimulate discussion and seems to cover most of the scope for reform. This strikes a pragmatic balance between the desire for detail and the practical problems of having too much choice. The founders of the ‘Balanced Scorecard’ made a similar point about pragmatism, which contributed to the rapid uptake of that concept (Kaplan 2010). The resulting listing of the corruption issues within any one sector is termed a ‘sector typology’. The typology for the education sector as discussed here is shown in Figure 8.2 (CurbingCorruption 2019b). Each issue in Figure 8.2 is expressed in an abbreviated way so that practitioners can see the totality of the issues on a single page. Typologies for other sectors using this same codification approach, and with more expansive explanations of each of the corruption issues, can be found for defence, electricity and power, health, land and policing (CurbingCorruption 2019c). The same approach can be applied to sub-sectors: within the health sector, for example, there have been analyses of sub-sectors such as pharmaceuticals and maternal health. The sub-headings as used in Figure 8.2 usually vary from sector to sector. In health, for example, a good approach is to use the six major health systems building blocks as defined by WHO (2007) and USAID (2017). These are: health system delivery, leadership and governance, health workforce, medical products/vaccines and technologies, health financing and health informatics. In another sector, a different set of categories will be appropriate (e.g. see Masters (2015) and Graycar (2015) for an application to corruption reform in sport). Context Context is all-important. In this sector approach we deliberately separate that context into two components: the context within that sector, and the broader context.

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104  Handbook on corruption, ethics and integrity in public administration

Figure 8.2

Corruption typology: school education

In each sector the cultural, functional, economic and political contexts will be distinct. For example, the culture that determines the nature of a favouritism issue in the education ministry is likely to be different from the culture in the oil and gas ministry. Even where the core process, like recruitment or procurement or policy making, is common across sectors, the reform measures are likely to be different. This difference between sectors also likely relates to ownership of the reforms. Reforms are more likely to get traction when there is an identifiable community who will adapt generalised reforms to the particular circumstances of their profession and their sector. The second element of context, the broader political and social environment, will always be relevant: reformers always need to be ‘thinking and working politically’ (Hudson et al. 2018). But by starting with the sector as the prime element of context – in all its functional, cultural and political detail – practitioners can thereby advance the depth of their analysis and plans. These differences between sectors also provide some opportunity for clean working despite a hostile broader political environment. For example, in mining, some of the better mining companies are very corruption risk-averse and they take steps to ensure that their operations are corruption-free, despite a broader political environment where corruption is the norm. Out of this phase comes understanding of each of the corruption issues and what is involved in tackling each one. But this is not yet close to representing a strategy. The most serious corruption issues may be too hard or too infeasible to tackle; conversely, tackling the smallest problems may have the most public impact, in giving people hope that at least some progress may be possible. Hence, we come to the next two phases – making sense of the merits of alternative priorities, and then thinking through alternative possible strategies.

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Redefining sectors  105

SENSE MAKING: USING A PROBLEM-DRIVEN APPROACH TO PRIORITISING CORRUPTION ISSUES Meaningful discussion of open system problems such as corruption issues is not easy to facilitate or to guide towards conclusion. The big purpose of the sector typology presented above is that it is can function as a powerful tool for encouraging deep discussion of the nature of each of the corruption issues in that sector/country/region. It is easily comprehensible – just one page. It is quickly and easily modified if there are local corruption issues that need to be more visible in the typology. There is a straightforward sequence of questions that relate to the assembly of issues: Which are the most common corruption issues? Which have the most impact on service delivery? Which are the costliest? Which cause the most distress with citizens? Which issues can be most easily fixed? Do some have common solutions? The underlying analytical approach for this discussion is that of sense making, which is the process by which people give meaning to their collective experiences. The concept was introduced in the 1970s by Weick (2001), as part of a movement that shifted thinking about organisations away from decision making and towards how people’s understanding drives organisation behaviour. It has been particularly influential in providing insights into how organisations take action in uncertain or ambiguous situations. More recently the subject has come up in the corruption reform literature in the guise of complexity thinking and problem-driven analysis (e.g. Bridges and Woolcock 2017, as applied to World Bank anti-corruption experience in Malawi). Another sense-making approach to corruption reform is used by Klitgaard (1988, 2019), under the title of ‘convening’. In this recent work with the International Monetary Fund, he gives the example of working through the corruption issues with the leadership of the Philippines in 2010 (see also Sidel 2014). These typology discussions are not simply an analytical exercise. On the contrary, they have the power to build a deep shared understanding on the most pressing corruption issues in the sector. You use this discussion to reach agreement on the relative magnitude of each issue, their relative political priority and feasibility and which ones to leave until later. This is how you build shared knowledge across your sector leadership and stakeholders of the issues and the priorities. The author has experience of using this approach in many countries using a facilitated, open format as part of a day-long leadership event. Once the group has determined that it is politically safe to talk about this subject, they usually then do so with clarity and perceptiveness. Here is an example from the defence sector in an African nation. The leadership group, some 30 generals and top Ministry of Defence officials, discuss the defence typology page – 29 defence corruption issues in all – to identify the issues that should be taken most seriously. After discussion, the group participants ‘vote’ to show their top five priorities. In this case they are illicit control of the intelligence services, favouritism in pay and promotion, improper tendering of contracts, improper disposal of military assets and disregard of corruption in any country to which they are deployed. A similar exercise in an Asian country, based on the deliberations of 100 senior colonels, was equally explicit on the scale of the issues and their relative priority for reform. They too voted on the top corruption issues, which proved to be the illicit use of secret budgets, awarding contracts without competition and favouritism in pay and promotion (Pyman 2017). In these two country cases the leadership group felt secure enough

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106  Handbook on corruption, ethics and integrity in public administration to vote openly on the issues. In more sensitive environments the voting is done by writing the issues on closed paper slips, which the facilitator then collates. A quite different application can be seen in a major analysis of corruption vulnerability in the education sector in Afghanistan (MEC 2017). The typology shown in Figure 8.2 was used as the basis for the analysis, which consisted of 540 interviews in the ministry and in schools across the country. The result was that one particular issue was by far the most serious – the nepotistic appointment of teachers across the country – in priority to other corruption problems such as corruption in school construction.

OBJECTIVES, REFORM EXAMPLES AND POSSIBLE STRATEGIES Let us pick up again the example of the health minister from the introduction. The minister wants to move from analysis to strategy: ‘Should we tackle the political issues first, or the technical weaknesses, or the easiest problems?’ ‘Should we be aggressive about reform or low profile, broad or targeted?’ But the starting point is a little earlier: What is the objective of this reform? The answer might be obvious for a small project, like eliminating the unofficial payments to officials for services that should be free. But on any larger scale, the objective needs some thought and is often not obvious. The key point is that reducing corruption is usually not the main objective. Many would assume this to be the core objective of an anti-corruption strategy. But reducing corruption is more usually a means towards more widely desired policy objectives, such as improving service delivery for citizens, rather than the desired end result in itself. This is true both for nations at peace and for nations in states of conflict. A recent analysis of national-level anti-corruption strategies from 41 middle-income countries reinforces this point, identifying a curious array of objectives stated in the various country strategies. These included the following: to improve service delivery; to improve national reputation; to improve the nation’s ranking in the Corruption Perceptions Index; to strengthen democracy/transparency/integrity; to improve economic prosperity; to improve economic competitiveness; to strengthen national security; to be aligned with international anti-corruption standards; and to gain accession to the European Union (Pyman et al. 2017, 2018). Gaining Insight into Other Reforms Practitioners want to see examples of reforms used elsewhere in their sector. Not so that they can absorb ‘best practice’ – because circumstances and context are always different – but to give them ideas on which they can brainstorm the development of their own solutions. It is hard to overstate the importance of this. Professionals in many sectors learn by studying how others in their profession have tackled problems in the past. In the military, for example, officers learn by studying past campaigns, all the way back to the Greeks and the other ancient empires. It is nonsensical to think of this as ‘best practice’! For professionals in most sectors, corruption is a poorly understood phenomenon, one that they had no experience of working with during their professional education and training: as a result, they do not have the mental models of what could be used or how. This

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Redefining sectors  107 is why sector examples from elsewhere are so important, much more so than just in generic prescriptions of ‘transparency’ or any other reform approach. If you have not already done this exercise yourself, there is an extraordinary paucity of reform stories. We do not really know why this should be so. There are multiple reasons for not writing up progress, not least that progress is always partial, political and fragile. Partial success is a poor, easily criticised narrative and it is so much easier to comment on the failure cases (Boamah and Pyman 2019; Boamah 2019). On the other hand, a good example inspires many. The success that the container company Maersk had in stopping the multitude of cigarette and whisky payments that had to be made to officials as their ships come into port is one such example. They had a clever mix of negotiation training of the key authority figures (the ships’ captains), strengthening onshore resolution capability in local offices and an IT system to track the gifts being given out (see Pyman 2019). It also helps reformers to simplify the types of reform. Here are the eight reform categories used by CurbingCorruption (2019d): 1. Functional reforms: improving institutions, public financial management, systems and controls. 2. People-centred approaches: working directly with affected communities; building networks and coalitions of supporters. 3. Monitoring approaches: strengthen oversight groups and their independence, whistleblowing. 4. Justice and rule of law approaches: prosecuting, raising confidence, improving laws. 5. Transparency reforms: making visible what others wish to keep hidden. 6. Integrity reforms: motivating, instilling pride and commitment. 7. Civil society and media approaches: creating space for external voices. 8. Incentives, economic theory and nudge approaches: aligning stakeholders, economics, small changes. Possible Strategies Similarly, a limited palette of categories can be set out as the starting point for choosing strategy options. It is not helpful to tell the minister or the reform group that there are an infinite number of possible strategies. Options include the following: 1. Incremental reform 1: Multilateral organisations usually advise that you should choose incremental change (e.g. European Commission 2017, p. 211). The research from sense making also directs us towards recasting large problems into smaller ones. Weick (2001, p. 427).. The current international community working with Myanmar are following such an example (Chung 2019). 2. Incremental reform 2: Start with small changes so as to build momentum and credibility, moving on to larger change projects if the first smaller ones go well and/or if opportunities emerge for a sudden larger change. Academic research has identified this approach as the more common route to success: ‘change will occur gradually and punctuated equilibria will be the rule’ (Mungiu-Pippidi and Johnston 2017, p. 76). 3. Radical reform 1: But there are also powerful arguments for the opposite approach. When there is a political dimension to the corruption issues and a political opening happens, you

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108  Handbook on corruption, ethics and integrity in public administration may have that one chance to make a significant change. This is especially the case when there are large changes such as an election, or the disgrace of a major political figure, or a national disaster aggravated by corruption. Similarly, if the anti-corruption messages are part of the reason for coming into power, there is a need to show rapid change before the electorate becomes disappointed. 4. Radical reform 2: There are also arguments for large-scale change when there is no major political angle. Staff in large organisations can become expert at subverting change initiatives, whether in a global commercial organisation or in an Afghan ministry. Making a large, sudden step change can be a smart way to avoid such subversion. This could be on a micro scale, such as secret planning to remove the chief corruption perpetrator inside a directorate, or on a larger scale such as cutting off large pieces of an unreformable ministry so that each can be tackled as more manageable chunks. The successful national-level corruption reforms in Georgia and Estonia were both through large-scale, rapid change (and against the advice of international organisations). 5. One-signature-issue strategy: A health example might be to tackle the way that people can bribe their way to the top of a surgery waiting list. Success would be seen as a big result, even if all the other bigger and harder issues are left untackled. 6. Using the language of ‘integrity’ rather than corruption: The North Atlantic Treaty Organization defence sector anti-corruption initiative, for example, was branded ‘Building Integrity’ from its start in 2007, despite the scope covering a tradition scope of corruption reform (NATO 2019). 7. Media-centred strategy: Ignoring the media can be a strong predictor of failure. Research on 471 corruption reform projects in Eastern Europe showed that strategies which do not integrally involve the media had little impact (Mungiu-Pippidi 2015, pp. 172–4). 8. Sector-monitoring strategy: Rather than tackle the substance of the issues directly, an alternative strategy is to set up dedicated monitoring of the corruption reform in the sector. Possibly using sector-specific non-governmental organisations (NGOs) specifically established for the purpose: see, for example, the quarterly monitoring teams established by the Monitoring and Evaluation Committee in Afghanistan to monitor progress in health, education and the attorney general’s operations (MEC 2019). It goes without saying that the possible strategy options depend markedly on the strength of political support that the senior reformers have. If the minister has the strong support of the prime minister, then more can be achieved than if their support is lukewarm or non-existent. The Health Ministry example is one example, as have been some of the Afghanistan sectoral reforms under President Ghani (e.g. Pyman and Kaakar 2018). On the other hand, reform is still possible without ‘to-cover’, though it has to take different forms. Some of the defence reform examples showed this effect, such as in the Ukraine security service in 2011, where the reformers were rather precisely aware of what they could hope to change and what they could not in their environment of minimal top-level support (Pyman 2017).

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Redefining sectors  109

INTERNATIONAL SUPPORT, GUIDANCE AND DIRECTION In the introduction we made the point that the international organisations in the sectors, both government and corporate, are considered as having a responsibility to contribute towards curbing corruption in the sector. What might we most want from international cooperation in sector corruption reform? A strong answer would be if there could be a set of regulations and operating guidance that more or less eliminates corruption from the sector. It would probably act by specifying what the equivalent sector organisations at national level would need to follow and to see this applied rigorously in every country in the world. One possible example could be in relation to the problem of falsified and sub-standard medicines in the health sector, where transnational cooperation might take a very strict approach. Perhaps the most extreme example, and therefore perhaps an outlier, is civilian aviation operations. There are corruption concerns in the aviation sector as a whole – related to buying, selling and financing commercial aircraft, and in relation to the many related support services (Control Risks 2018) – but there are very few in the sub-sector of civilian aviation operations, the control of planes flying round the world. This lack of corruption is due not to anti-corruption efforts but to an intense focus on safety. Aviation has a strong international body (International Civil Aviation Organization) which sets the standards for all the equivalent national organisations in all the countries of the United Nations. This body has a sophisticated and directive approach to analysing and eliminating threats and hazards of whatever kind from aviation operations (Civil Aviation Authority 2013). This aviation operations example represents one end of the spectrum, where there are strong global rules which dictate how the sector operates and those rules are strictly obeyed. Below this are global organisations but without any regulatory mandate and a mixed interest in curbing corruption. ●● Sectors where there is a recognised global body for the sector, but it does not ‘regulate’ nations. As a generality, none of these bodies have a strong voice on controlling corruption, though they can mostly point to anti-corruption initiatives. Examples include the World Customs Organization for customs (2019), International Maritime Organization for shipping (2019) and IIEP at UNESCO for the education sector (IIEP at UNESCO 2019). Mostly these are small, narrowly focussed initiatives. Promisingly, WHO (2018) has a new networking initiative for anti-corruption for the health sector. ●● Sectors where the international bodies are representative rather than authoritative, and/ or represent only a certain part of the sector. They too usually do not have a strong voice on controlling corruption. Examples include the Geneva-based Centre for Security Sector Governance collating good practices in police corruption reform and integrity strengthening. ●● Organisations for local government sector reform, such as the Open Government partnership’s ‘Local’ programme, the Council of Europe’s Centre of Expertise for Local Government Reform and United Nations Habitat (2006).

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110  Handbook on corruption, ethics and integrity in public administration Next is where there is no relevant multilateral body, but there are one or more multistakeholder initiatives: ●● Some seek to set standards in specific components of the sector. E.g. the Extractive Industries Transparency Initiative (EITI) in the oil/gas and mining sector with 52 nations as members, and the Infrastructure Transparency Initiative in the construction sector. ●● Some seek to share good practice sharing rather than setting standards. E.g. the OECD Water Governance Initiative sharing good practices in the sector, a sector-specific NGO, water regulators and water companies (OECD 2019). ●● Some are tightly focussed on corruption reform in the sector. Examples include Transparency International’s Defence and Security programme in the defence sector (Transparency International Defence 2011, 2015a, 2015b, 2018), its programme in the health sector and the Fisheries Industries Transparency Initiative (2019) in the fisheries sector (CurbingCorruption 2019e). Next is where there are academics, working individually or in small groups, on corruption reform in particular sectors. Examples include Professor Vian in health, Professors Kutnjak Ivkovic, Newburn and Prenzler on policing. Lastly, there are the sectors where there is currently little or no focus on tackling corruption in the sector. Examples include agriculture, culture heritage and tourism, electricity and power, religious organisations and telecommunications. Besides the sector-specific entities above, the bilateral and multilateral aid organisations are also active, with their own sector teams. Several of them have been active funders of some of the above initiatives. But they also have work to do to improve in this sector space: most of them have separated anti-corruption efforts out to ‘governance’ and hence removed the topic from the mainstream sector teams. As a result, their depth of knowledge and their options to develop sector-specific responses are not being developed as they might. Finally, the other tool in the international community is the use of indices to indicate comparative progress or decline. A major advantage of the sector approach is that it is possible to construct indices of how thoroughly each country’s sector has set itself up against corruption. This is not yet commonplace, but enough work has been done to know that the methodology can be sound and the results useful in practice. The defence sector has the most data and a robust methodology – detailed comparative data on 130 countries in the Government Defence Index and 165 companies in the Companies Defence Index (Transparency International 2015a, 2015b). These date from 2012 and Transparency International is currently carrying out the third iteration of the two indices. Indices for other sectors, notably health and education, were developed some years ago by Global Integrity. In the defence sector, these indices have been having a significant effect in driving change in both the countries and the companies (Pyman 2017). These metrics, though, really need to be owned by independent entities, preferably NGOs, as established multilateral organisations will not be keen to criticise member states.

OPTIMISM BIAS AND CONCLUDING THOUGHTS We have all learnt to be modest when it comes to our hopes in tackling corruption. As one of today’s most renowned anti-corruption researchers puts it, we are in the domain of ‘great expectations and humble results’ (Mungiu-Pippidi 2015, p. 207). The approach put forward in

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Redefining sectors  111 this chapter will not, and is not intended to, replace other approaches, such as national-level or governance-focussed approaches. This sector approach may yet prove to have disadvantages that we cannot yet see. Nonetheless, perhaps confirming the eternal optimism bias of the committed practitioner, this author is hopeful that the anti-corruption community, globally and locally, is in the process of moving into a new phase. One vision is that each sector will develop an ecosystem of anti-corruption and integrity entities: a vibrant network of professionals in the sector anchored by some neutral body (like OECD’s Water Governance network), a strong industry grouping in the sector (like the Marine Anti-Corruption Network in the shipping sector), a strong NGO with sector expertise (like Transparency International Defence), a multicountry sector initiative among enthusiast countries (like EITI in the extractives sector), a robust index that compares all the countries and companies in that sector (like the two Transparency International defence indices) and a global regulator/coordinator/standard setter for anti-corruption in the sector housed in an established multilateral sector entity (no candidates have emerged yet). What is not in doubt, I believe, is that there is a huge resource of sector-based competence, knowledge and personal professional motivation that has yet to be applied to anti-corruption. As those in each sector, both public and private groups, take the responsibility for corruption in their sector and fixing the problems, anti-corruption efforts have the potential to grow dramatically larger than we have seen to date.

REFERENCES Afghanistan Independent Joint Anti-Corruption Monitoring and Evaluation Committee (MEC) (2017), Ministry-wide vulnerability to corruption assessment of the Ministry of Education, accessed 16 September 2019 at www​.mec​.af/​files/​2017​_23​_10​_moe​_english​.pdf Afghanistan Independent Joint Anti-Corruption Monitoring and Evaluation Committee (MEC) (2019), ‘Follow up reports’, accessed 16 September 2019 at www​.mec​.af/​index​.php/​reports/​follow​-up​-reports Boamah, Festus (2019), ‘New perspectives on corruption reform in the electricity sectors of Kenya and Ghana’, accessed 20 August 2019 at https://​curbingcorruption​.com/​wp​-content/​uploads/​2019/​08/​ 190812​-Boamah​-New​-Perspectives​-Kenya​-and​-Ghana​.pdf Boamah, Festus and Pyman, Mark (2019), ‘Usain Bolt meters: reform successes in the electricity sector can go fast, but only the failures are reported’, accessed 16 September 2019 at https://​ace​ .globalintegrity​.org/​usain​-bolt/​ Bridges, Kate and Woolcock, M. (2017), ‘How (not) to fix problems that matter: assessing and responding to Malawi’s history of institutional reform’, accessed 16 September 2019 at http://​documents​ .worldbank​.org/​curated/​en/​349361513957973588/​How​-not​-to​-fix​-problems​-that​-matter​-assessing​ -and​-responding​-to​-Malawis​-history​-of​-institutional​-reform Campos, J. Edgardo and Pradhan, Sanjay (eds) (2007), The many faces of corruption: tracking vulnerabilities at the sector level, Washington, DC: World Bank. Chung, Heesu (2019), ‘Local government sector: Myanmar case study’, CurbingCorruption, accessed 16 September 2019 at https://​curbingcorruption​.com/​wp​-content/​uploads/​2019/​07/​190710​ -CurbingCorruption​-Myanmar​-research​-report​-Heesu​-Chung​.pdf Civil Aviation Authority (2013), ‘Bowtie risk assessment models’, accessed 19 August 2019 at www​.caa​ .co​.uk/​Safety​-initiatives​-and​-resources/​Working​-with​-industry/​Bowtie/​About​-Bowtie/​Introduction​ -to​-bowtie/​ Control Risks (2018), ‘Anti-corruption compliance in aviation: staying ahead of the trend’, accessed 16 September 2019 at www​.controlrisks​.com/​our​-thinking/​insights/​anticorruption​-compliance​-in​ -aviation CurbingCorruption (2019a), ‘Sectors’, accessed 16 September 2019 at https://​curbingcorruption​.com/​ sectors/​

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112  Handbook on corruption, ethics and integrity in public administration CurbingCorruption (2019b), ‘The education sector’, accessed 21 August 2019 at https://​curbingcorruption​ .com/​sector/​education/​ CurbingCorruption (2019c), ‘Sector typologies’, accessed 16 September 2019 at https://​curbingcorruption​ .com/​corruption​-types/​ CurbingCorruption (2019d), ‘Reform strategies’, accessed 16 September 2019 at https://​curbingcorruption​ .com/​reform​-approaches/​ CurbingCorruption (2019e), ‘Fisheries sector’, accessed 16 September 2019 at https://​curbingcorruption​ .com/​sector/​fisheries/​ Deloitte (2013), ‘Demystifying change management’, accessed 16 September 2019 at www2​.deloitte​ .com/​content/​dam/​Deloitte/​lu/​Documents/​public​-sector/​lu​-demystifying​-change​-management​.pdf European Commission (2017), ‘Thematic factsheet: fight against corruption’, accessed 19 August 2019 at https://​ec​.europa​.eu/​info/​sites/​info/​files/​file​_import/​european​-semester​_thematic​-factsheet​_fight​ -against​-corruption​_en​.pdf Fisheries Industry Transparency Initiative (2019), accessed 16 September 2019 at http://​ fisheriestransparency​.org/​page/​2 Graycar, Adam (2015), ‘Corruption: classification and analysis’, Policy and Society, 34, 87–96, accessed 20 September 2019 at www​.tandfonline​.com/​doi/​full/​10​.1016/​j​.polsoc​.2015​.04​.001 Her Majesty’s Government (HMG) (2017), United Kingdom anti-corruption strategy 2017–2022, Crown Publishing Service, accessed 19 August 2019 at https://​assets​.publishing​.service​.gov​.uk/​government/​ uploads/​system/​uploads/​attachment​_data/​file/​667221/​6​_3323​_Anti​-Corruption​_Strategy​_WEB​.pdf Heywood, Paul (2017), ‘Rethinking corruption: hocus-pocus, locus and focus’, Slavonic and East European Review, 95(1), 21–48. Heywood, Paul and Pyman, Mark (2018), ‘CurbingCorruption “Definition of a sector”’, accessed 18 August 2019 at https://​curbingcorruption​.com/​sectors/​ Hudson, David, Mcloughlin, C., Roche, C. and Marquette, H. (2018), ‘Inside the black box of political will: 10 years of findings from the Developmental Leadership Program’, Development Leadership Program, accessed 18 August 2019 at www​.dlprog​.org/​publications/​research​-papers/​inside​-the​-black​ -box​-of​-political​-will​-10​-years​-of​-findings​-from​-the​-developmental​-leadership​-program International Institute for Educational Planning (IIEP) at UNESCO (2019), ‘Ethics and corruption reform in education’, accessed 19 August 2019 at www​.iiep​.unesco​.org/​en/​our​-mission/​ethics​-and​ -corruption​-education International Maritime Organization (2019), ‘IMO sets new anti-corruption agenda’, accessed 19 August 2019 at www​.maritime​-executive​.com/​article/​imo​-sets​-new​-anti​-corruption​-agenda Kaplan, Robert (2010), ‘Conceptual foundations of the Balanced Scorecard’, working paper 10-074, Boston, MA: Harvard Business School, accessed 23 September 2019 at www​.hbs​.edu/​faculty/​Pages/​ item​.aspx​?num​=​37638 Khan, Mushtaq, Andreoni, A. and Roy P. (2010), ‘Anti-corruption in adverse contexts: a strategic approach’, accessed 24 September 2019 at https://​eprints​.soas​.ac​.uk/​23495/​1/​Anti​-Corruption​%20in​ %20Adverse​%20Contexts​%20​%281​%29​.pdf Klitgaard, Robert (1988), Controlling corruption, Berkeley, CA: University of California Press. Klitgaard, Robert (2019), ‘Engaging corruption: new ideas for the International Monetary Fund, policy design and practice’, accessed 8 August 2019 at www​.tandfonline​.com/​doi/​full/​10​.1080/​25741292​ .2019​.1612542 Masters, Adam (2015), ‘Corruption in sport: from the playing field to the field of policy’, Policy and Society, 34, 111–23. Mungiu-Pippidi, Alina (2015), The quest for good governance: how societies develop control of corruption, Cambridge: Cambridge University Press. Mungiu-Pippidi, Alina and Johnston, Michael (eds) (2017), Transitions to good governance, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing. NATO (2019), ‘Ten years of NATO’s Building Integrity Programme’, accessed 16 September 2019 at https://​buildingintegrity​.hq​.nato​.int/​?AspxAutoDetectCookieSupport​=​1 Organisation for Economic Co-operation and Development (OECD) (2017), ‘Public integrity: a strategy against corruption’, accessed 8 August 2019 at www​.oecd​.org/​gov/​ethics/​OECD​-Recommendation​ -Public​-Integrity​.pdf

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Redefining sectors  113 Organisation for Economic Co-operation and Development (OECD) (2019), ‘The OECD water governance initiative’, accessed 19 August 2019 at www​.oecd​.org/​cfe/​regional​-policy/​water​-governance​ -initiative​.htm Pope, Jeremy (2000), ‘The TI source book’, accessed 8 August 2019 at www​.transparency​.org/​news/​ pressrelease/​ti​_source​_book​_now​_on​_internet Pyman, Mark (2017), ‘Addressing corruption in military institutions’, Public Integrity, 19(5), 513–28, accessed 23 September 2019 at www​.tandfonline​.com/​doi/​abs/​10​.1080/​10999922​.2017​.1285267 Pyman, Mark (2019), ‘From Maersk, AEC, and Shell, inspiring stories about changing corporate behaviour’, FCPA blog, 23 July, accessed 19 August 2019 at www​.fcpablog​.com/​blog/​2019/​7/​23/​from​ -maersk​-aec​-and​-shell​-inspiring​-stories​-about​-changing​-c​.html Pyman, Mark and Kaakar, S. (2018), ‘Afghanistan’s radical – and so-far-surprisingly successful – public procurement reforms’, Global Anti-Corruption blog, 8 March 2018, accessed 23 September 2019 at https://​globalanticorruptionblog​.com/​2018/​03/​08/​guest​-post​-afghanistans​-radical​-and​-so​-far​ -surprisingly​-successful​-public​-procurement​-reforms/​ Pyman, Mark, Eastwood, S., Hungerford, J. and Elliott, J. (2017), ‘Research comparing 41 national anti-corruption strategies: insights and guidance for leaders’, accessed 19 August 2019 at https://​ curbingcorruption​.com/​wp​-content/​uploads/​2018/​07/​Pyman​-et​-al​-2017​-Research​-comparing​-41​ -national​-anti​-corruption​-strategies​.pdf Pyman, Mark, Eastwood, S., Hungerford, J. and Elliott, J. (2018), ‘Analysing the anti-corruption approaches of the 26 top-ranked countries: an opportunity for a new generation of strategies’, accessed 19 August 2019 at https://​curbingcorruption​.com/​wp​-content/​uploads/​2018/​07/​Pyman​-et​-al​-2018​ -Analysing​-the​-anti​-corruption​-approaches​-of​-the​-26​-top​-ranked​-countries​-copy​.pdf Rothstein, Bo and Varraich, A. (2017), Making sense of corruption, Cambridge: Cambridge University Press. Sidel, John (2014), ‘Achieving reforms in oligarchical democracies: the role of leadership and coalitions in the Philippines’, DLP Research Paper 27, Birmingham: Developmental Leadership Program, accessed 19 August 2019 at www​.dlprog​.org/​publications/​achieving​-reforms​-in​-oligarchical​-democracies​-the​ -role​-of​-leadership​-and​-coalitions​-in​-the​-philippines​.php Spector, Bertram (ed.) (2005), Fighting corruption in developing countries, Boulder, CO: Lynne Rienner, accessed 19 August 2019 at www​.amazon​.co​.uk/​Fighting​-Corruption​-Developing​-Countries​ - Strategies/dp/1565492021 Transparency International Defence and Security (2011), ‘Corruption threats and international missions: practical guidance for leaders’, accessed 16 September 2019 at http://​ti​-defence​.org/​publications/​ corruption​-threats​-international​-missions​-practical​-guidance​-for​-leaders/​ Transparency International Defence and Security (2015a), ‘Government defence anti-corruption index’, accessed 16 September 2019 at http://​government​.defenceindex​.org/​#intro Transparency International Defence and Security (2015b), ‘Defence companies anti-corruption index’, accessed 16 September 2019 at http://​companies​.defenceindex​.org Transparency International Defence and Security (2018), ‘Global standards for responsible defence governance’, accessed 16 September 2019 at http://​ti​-defence​.org/​wp​-content/​uploads/​2018/​07/​Global​ _Standards​_Responsible​_Defence​_Governance​_v2​.pdf United Nations Habitat (2006), ‘Restore the health of your organization: a practical guide to curing and preventing corruption in local governments and communities, Volume 1, Concepts and strategies’, Fred Fisher, accessed 19 August 2019 at https://​unhabitat​.org/​books/​restore​-the​-health​-of​ -your​-organisation​-a​-practical​-guide​-to​-curing​-and​-preventing​-corruption​-in​-local​-government​-and​ -communities​-volume​-1​-concepts​-and​-strategies/​ USAID (2017), Health system assessment approach: version 3.0, accessed 19 August 2019 at www​ .hfgproject​.org/​the​-health​-system​-assessment​-approach​-a​-how​-to​-manual/​ Weick, Karl E. (2001), Making sense of the organization, Malden, MA: Blackwell. World Customs Organization (2019), ‘New anti-corruption initiative’, accessed 19 August 2019 at www​ .wcoomd​.org/​en/​media/​newsroom/​2019/​april/​the​-wcos​-new​-anti​-corruption​-programme​-highlighted​ -at​-the​-integrity​.aspx World Health Organization (WHO) (2007), Everybody’s business: strengthening health systems to improve health outcomes. WHO’s framework for action, Geneva: World Health Organization, accessed 16 September 2019 at www​.who​.int/​healthsystems/​strategy/​everybodys​_business​.pdf

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114  Handbook on corruption, ethics and integrity in public administration World Health Organization (WHO) (2018), ‘Integrating a focus on anti-corruption, transparency and accountability in national health policies, strategies and plans’, accessed 19 August 2019 at https://​ apps​.who​.int/​iris/​bitstream/​handle/​10665/​310991/​9789241515177​-eng​.pdf

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9. Corruption and administration in healthcare Taryn Vian

INTRODUCTION Corruption affects all countries and all parts of the health system. In 42 of 109 countries surveyed by Transparency International, more than 50 percent of respondents stated that the health sector was corrupt or very corrupt (Mackey, Vian, & Kohler, 2018). Fraud and abuse account for 3–10 percent of Medicare expenditures in the United States (US), with billions of dollars lost each year (Berwick & Hackbarth, 2012). For example, in West Africa, the top five frequently reported corrupt practices include absenteeism, diversion of patients to private facilities, procurement corruption, informal payments, and theft of medicines (Onwujekwe et al., 2019). Corruption in public administration may involve private firms as well. In 2014, the pharmaceutical giant GlaxoSmithKline was heavily fined because its sales agents had engaged in bribery to influence doctors’ prescribing practices (Barboza, 2016; Sullivan, 2018). Corruption affects national and local governments, development banks, aid agencies, and religious organizations, all of which are active in the health sector. It impedes progress toward universal health coverage, an important strategy to achieve the United Nations Sustainable Development Goal 3, ensuring healthy lives and promoting well-being for all. All countries and all health institutions need to consider how they can combat corruption.

CONSEQUENCES OF CORRUPTION Corruption has a profound effect on the health and well-being of populations, and on the development of nations. It undermines health by limiting access to health services and financial protection, and reducing the quality of services. Studies have linked corruption with population health outcomes including infant, child, and maternal mortality, cancer deaths, motor vehicle crash deaths, earthquake-related fatalities, anxiety, poor general health, and antibiotic resistance (Ambraseys & Bilham, 2011; Collignon, Athukorala, Senanayake, & Khan, 2015; Gillanders, 2016; Radin, 2009; Teik Hua, Noland, & Evans, 2010). Other effects of corruption include lower patient satisfaction with care and eroded trust in the healthcare system (Habibov, 2016; Radin, 2013). Corruption’s effect on health, and the diversion of public resources for health, undermines economic and social development (World Bank, 1993). The purpose of this chapter is to analyze corruption in the health sector against the six core building blocks advanced by the World Health Organization (WHO).

PATTERNS OF ABUSE AND CORRUPTION Patterns of abuse of power and corruption in health systems vary depending on how the sector is organized and financed. The Organisation for Economic Co-operation and Development 115 Taryn Vian - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:35PM via The University of British Columbia Library

116  Handbook on corruption, ethics and integrity in public administration identifies five categories of important actors in health systems: payers (public and private insurance programs); regulators (ministry of health, medicine regulatory authority); suppliers (companies from whom the government buys medicines and equipment); providers (hospitals, health centers, individual or group physician practices); and patients/taxpayers (Couffinhal & Frankowski, 2017). Integrity violations, including corruption and fraud, happen in the interactions among these different stakeholders (Figure 9.1).

Source: Couffinhal and Frankowski, 2017.

Figure 9.1

Organisation for Economic Co-operation and Development model of integrity violations in the health sector

Intentional waste and integrity violations fall into three main areas: 1. Violations involving service delivery, payment, and coverage (including undue denial of coverage, informal payments, overbilling or underprovision of care, and embezzlement); 2. Violations involving procurement and distribution systems (for example, bid-rigging, kickbacks, other forms of corruption in the procurement and delivery of medicines, medical supplies, and devices or durable medical equipment); and 3. Inappropriate business practices to secure a more favorable market position. This last category encompasses undue influence exercised on legislators or other health officials by industry representatives (for example, the pharmaceutical, tobacco, and food and beverage industries) to shape public policies to favor commercial interests. Strategies and influences from manufacturers that are detrimental to health have been called “corporate” or “commercial” determinants of health (Hessari, Rusking, McKee, & Stuckler, 2019). Corporations may lobby politicians to drop or reduce regulations on industry, such as blocking efforts to tax sugar-sweetened beverages or increase the legal drinking age. Some forms of lobbying are legal and regulated, but abusive practices are also present. Public officials may

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Corruption and administration in healthcare  117 receive economic offers to join companies after leaving government, so called “revolving door corruption”. At the facility level, occupational fraud affects many health institutions. In one study of 4,111 hospital workers, 27 percent admitted to taking supplies, 8 percent said they had taken medicines, and up to 6 percent admitted to engaging in other forms of deviance, such as falsifying time sheets or expense reports, or stealing equipment, in the past year (Wells, 2011). Undertaken in a US hospital, this study highlights that corruption is a “crime of opportunity” (Klitgaard, 1988). Although corruption may involve elites entangled in political corruption, it also involves people who are tempted by an opportunity – a system that has few controls, a lot of power vested in a few people, and little accountability. Since it is a systems problem, it is important to take a health systems approach to controlling corruption.

APPLYING A HEALTH SYSTEMS VIEW Corruption can affect public administration especially in areas of service delivery, human resources management, medicines, information systems, financing, and governance. The WHO has advanced a strategy to integrate anti-corruption efforts into work to strengthen health systems towards universal health coverage (WHO, 2019a). Figure 9.2 shows how the WHO strategy for anti-corruption, transparency, and accountability encompasses the six core “building blocks” of the health system mentioned above. The vulnerabilities to corruption in each of these building blocks is discussed below.

Source: Adapted from WHO, 2007 by the author.

Figure 9.2

A health systems approach to fighting corruption

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118  Handbook on corruption, ethics and integrity in public administration

DELIVERY OF SERVICES Service delivery includes the provision of personal and non-personal health services, including promotion, prevention, treatment, rehabilitation, population health measures, referral systems, and community engagement. Corruption risks in service delivery overlap with those of other building blocks, and include misappropriation of medicines, equipment or cash (Kohler, Chang Pico, Vian, & Mackey, 2018), fraudulent billing (Peixoto, Rocha, Nishijima, & Postali, 2012), ghost workers1 and unjustified absenteeism (Belita, Mbindyo, & English, 2013), conflicts of interest affecting management decisions and prescribing (Nguyen et al., 2018), informal payments (Khodamoradi, Ghaffari, Daryabeygi-Khotbehsara, Sajadi, & Majdzadeh, 2018), and risks associated with dual job holding, that is, the practice of allowing staff to legally maintain a private practice in addition to their public-sector job (Abera, Alemayehu, & Herrin, 2017). The appearance of corruption at service delivery points is in some sense not the primary problem, but rather the result of upstream issues such as industry influence on service delivery policies, inadequate payment of health workers, combined with low risk of detection of corruption, poor incentives, and lack of clear policies, procedures, and oversight for accountability.

HUMAN RESOURCES FOR HEALTH Currently, 43.5 million health workers are employed in 165 United Nations Member States (WHO, 2016). Yet, many countries have inadequate numbers of health workers to meet population health goals, and workers are inadequately compensated and undermotivated. These pressures create risk for corruption problems such as ghost workers, occupational fraud, and nepotism and favoritism affecting recruitment, assignment, transfer, and promotion (Bertone, Martins, Pereira, Martineau, & Alonso-Garbayo, 2018). In countries like India and Azerbaijan, unofficial systems for the sale of jobs also are a problem (Davis, 2004). High rates of unexcused absence (“stealing time”) have been documented in many countries (Figure 9.3). Medical education systems may also be corrupt, with admission bribery or students being asked to pay for grades and diplomas (Paredes-Solis et al., 2011). Policies such as dual job holding have the potential to reduce absenteeism and incentivize staff, but must be carefully designed and monitored to assure that staff do not inappropriately refer patients to their private practice or shirk public-sector duties (Hipgrave & Hort, 2014). Absenteeism can be monitored through biometric attendance systems, but the roots of unauthorized absenteeism must also be addressed (Mukasa et al., 2019). These include unreliable transportation, lack of adequate resources to work, and inadequate supervision. To reduce risks of corruption in human resources, countries should prioritize merit-based and fair selection and promotion systems, and transparency in all processes. This is important both for medical schools as well as government agencies and health facilities. A rigorous system for licensing and credentialing decisions is critical, as unqualified individuals can gain access to service delivery positions if these systems are compromised through bribery or conflicts of interest. Finally, it is important to assure that health workers receive adequate pay and have access to the tools and supplies they need to do their jobs. Low pay can be a reason for workers engaging in corruption, and lack of medicines may lead to health workers requesting informal payments. One way to measure adequacy of pay is to analyze the relative pay rates

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Corruption and administration in healthcare  119

Note: Indicator definition: number of health professionals that are not off duty who are absent from the facility on an unannounced visit as a share of ten randomly sampled workers. Health professionals doing fieldwork were counted as present. Source: Service Delivery Indicator Survey, World Bank in partnership with the African Economic Research Consortium and the African Development Bank, www​.sdindicators​.org (accessed August 18, 2019).

Figure 9.3

Absence from health facility in eight African countries

of public health sector workers compared to the private sector. Private-sector data may be available through a country’s bureau of statistics or department of labor.

MEDICINES AND TECHNOLOGY The pharmaceutical industry is worth more than $1 trillion worldwide. Lack of transparency and weak regulatory systems’ enforcement create risks of undue influence, fraud and abuse in clinical trials, medicine registration, selection, procurement, and service delivery. Institutional corruption in government regulatory agencies and procurement offices can allow for conflicts of interest and collusion during the tendering processes, resulting in higher prices paid and lower access to medicines (Anti-Corruption Action Centre, 2013). The potential for financial gain is a factor in theft of medicines from public warehouses: one carton of third-line anti-retroviral medicines might be worth more than the annual salary of the worker loading the delivery truck. Corruption can cost lives by allowing the infiltration of substandard and falsified SF medical products on the market. Over 13.6 percent of essential medicines tested in low- and middle-income countries failed quality analysis overall, with regional prevalence of 18.7 percent in Africa and 13.7 percent in Asia (Ozawa et al., 2018). SF cause unnecessary mor-

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120  Handbook on corruption, ethics and integrity in public administration bidity and mortality, and can lead to anti-microbial resistance. In one study of 39 African countries, 122,350 malaria deaths in children under five were associated with poor-quality anti-malarial medicines, about 3.75 percent of all child deaths (Renschler, Walters, Newton, & Laxminarayan, 2015). Interventions in this building block include greater transparency and accountability, using tools piloted through two WHO initiatives: the Medicines Transparency Alliance (MeTA) and the Good Governance for Medicines (GGM) program. MeTA operated in seven countries from 2008 to 2015. Countries applied a multistakeholder approach involving government, private for-profit, and community-based stakeholders. MeTA found that regular policy dialogue, coupled with capacity building for civil society organizations, helped to reinforce government accountability, furthering access to medicine goals and reducing opportunities for corruption (Paschke, Dimancesco, Vian, Kohler, & Forte, 2018). The GGM program developed a transparency tool to assess public pharmaceutical systems (Baghdadi-Sabeti, Cohen-Kohler, & Wondemagegnehu, 2009). This tool has been used in 32 countries to identify gaps in transparency and target improvement efforts. To combat SF medicines, a multifaceted strategy is needed including better data collection, cost-effective testing technologies, and full implementation of the WHO “prevent, detect, and respond” regulatory framework for SF medicines (Nayyar et al., 2019).

INFORMATION SYSTEMS Health information systems are critical to policy making and evidence-based treatment decisions. Corruption can compromise the validity and confidentiality of data used to develop health policies and clinical care guidelines, process claims, and grant access to health benefits. Health insurance systems are susceptible to corruption in the form of false claims for reimbursement, kickbacks, and self-referrals (Rashidian, Joudaki, & Vian, 2012). Gee and Button (2015) estimate the global average loss rate from healthcare fraud and abuse to be 6.19 percent of total health expenditure, or $455 billion, per year. The recipient of care is usually not aware of how much the insurance company is paying providers and so cannot provide a check on improper expenditures. Investing in data analytics, data mining (Joudaki et al., 2014), real-time audits, digital registration of patients, shared healthcare datasets, and information communication technology are important steps in combating healthcare fraud. Transitioning to electronic government (e-government) also has the potential to enhance government capacity, improve transparency, and transform the relationship between government officials, citizens, and businesses. In Bangladesh, the development of web-based tools and electronic information systems served as an entry point for strengthening governance in Bangladesh’s procurement systems for family-planning commodities and essential medicines, resulting in a 33–58 percent drop in time to procure medicines, and savings of $6.4 million (Walkowiak, Hafner, & Putter, 2018). Accurate and accessible information is essential for oversight and an important mechanism for improving efficiency, transparency, and accountability in the procurement and distribution of medicines.

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HEALTH FINANCING Corruption risks in the budget process include misallocation of funds based on political preferences, embezzlement, physician–pharma interactions influencing equipment purchases and prescribing of medicines, and informal payments. Misallocation of Funds/Embezzlement Uncertainty and asymmetry of information in the health system make it difficult to determine the “right” allocation of resources. People don’t know when they will get sick and may face barriers in seeking care, making it difficult to predict demand and to detect if spending has been influenced by corrupt transactions. In addition, health facilities may have categories of expenditure that do not fit into existing public accounting codes. For example, coding knee implant devices as “supplies” makes it difficult to monitor and/or detect diversion of this expensive cost item. Weak accounting systems create risk for embezzlement. The auditor general of Zambia uncovered embezzlement of $1.7 million in the Ministry of Health in 2009 – eventually they would document $5.7 million in lost funds, including $3 million of donor funding (Savedoff, Glassman, & Madan, 2016; Usher, 2010). The corruption was complex and coordinated: 32 government officials were eventually suspended from their jobs, and investigators believe that the corrupt scheme involved a high level of collusion: some of the faked documents had been signed by ten different officials. Budget transparency, stronger public financial management systems, and audit are strategies to help prevent misallocation of funds and detect embezzlement. Budget transparency may allow civil society organizations to apply data analytics to budget proposals and actual spending data, while public expenditure reforms can increase timely production of easy-to-read budget reports. In addition, people should be aware of their entitlements and obligations under the government healthcare system. They should know what services they are entitled to access free of charge. Finally, government financial audit reports can help identify problem areas and system weaknesses that need strengthening. Uptake of the recommendations in these reports should be monitored by civil society. Advocacy may be needed to generate funding to support capacity building in the area of financial management oversight. Conflicts of Interest Doctors are highly trained professionals with greater knowledge compared to patients: this makes it hard for patients to evaluate the treatment choices made by doctors. Yet, many doctors have conflicts of interest. In 2015, 48 percent of all physicians in the US received payments from industry, totally $2.4 billion (Tringale et al., 2017). In addition, industry representatives often have technical expertise that may exceed that of procurement or regulatory staff. These staff may rely on industry representatives to help set specifications for the purchase of large equipment items, and doctors may be reliant on pharmaceutical sales representatives for drug information and continuing medical education. Such factors allow biased medical decision making to continue. Interventions to combat these problems include restrictions on conflicts of interest, reforms to financing of continuing medical education, drug information centers and academic detail-

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122  Handbook on corruption, ethics and integrity in public administration ing, and open databases on industry payments. One study shows that policies limiting industry gifts to physicians and regulating drug representatives’ access at 19 academic medical centers resulted in an 8.7 percent decrease in relative market share for the promoted drugs (Larkin et al., 2017). Governments should establish policies and guidelines limiting conflicts of interest that can result in biased clinical decision making, including restricting physician financial interest in ancillary services such as laboratories and pharmacies. Industry-sponsored continuing medical education should be banned, or companies should be limited to contributing to an unrestricted pool of funding for educational programs. Independent drug information centers and academic detailing (an intervention involving a personal visit by a trained specialist to health professionals to provide unbiased, evidence-based information on drug therapy) also have been shown to counter problems of bias due to industry promotion (Wisniewski, Robert, & Ball, 2014). Informal Payments An informal payment in healthcare services is defined as “a direct contribution, which is made in addition to any contribution determined by the terms of entitlement, in cash or in-kind, by patients or others acting on their behalf, to healthcare providers for services that the patients are entitled to” (Gaal, Belli, McKee, & Szocska, 2006). Rates of informal payments in the health sector vary widely among countries: one review found rates from 3 to 80 percent, with notably higher rates in Central Asia and Eastern Europe (Khodamoradi et al., 2018). Informal payments have many causes, including ingrained cultural values of gift giving (see Box 9.1) and coping mechanisms adopted by health workers in underfinanced systems (Horodnic, Mazilu, & Oprea, 2018). Yet, payments also are sometimes extorted from patients and because of their informal, unregulated nature can result in health inequities, catastrophic out-of-pocket expenditures, and eroded trust and satisfaction with the healthcare system (Schaaf & Topp, 2019).

BOX 9.1 HEALTH-SECTOR CORRUPTION IN CHINA Health-sector corruption in China includes bribery in procurement of medicines and medical devices, illegal promotional activities influencing prescribing, and informal payments (“red envelopes”) between patients and medical providers. One article reported that 1,088 doctors and 133 administrators from 73 hospitals in Zhangzhou, Fujian Province accepted $3.34 million in bribes from pharmaceutical companies in 2013. GlaxoSmithKline paid a $489 million fine for illegal promotional activities such as bribes for prescribing and all-expense paid trips for medical professionals. While the majority of surveyed Chinese patients consider “red envelope” payments as gifts to express gratitude or honor their care giver, 25 percent said they made payments in response to hints from the provider, or because they feared they might otherwise get poor care. Corruption harms patients by increasing financial barriers to access, promoting irrational use of medicines, and reducing quality of care. Solutions attempted in China include the following: • Regulating against the practice of “red envelopes”. • Establishing Patient Complaint Centers at top-level hospitals.

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Corruption and administration in healthcare  123 • Increasing fines and criminal penalties for health procurement corruption. • Implementing a National Reimbursement Drug List and Essential Drug List, and centralizing purchases of pharmaceuticals at the provincial level (rather than individual hospitals). • Required reporting and blacklisting of manufacturers or distributors involved in bribery. These solutions have had mixed effects for several reasons. Taking a traditional, law enforcement approach to controlling informal payments ignores how the practice is rooted in cultural traditions and affected by economic factors such as income of providers. Fines imposed on firms engaged in bribery were too low to restrain bribery, and sometimes unfairly applied. Allowing individual provinces to update the Essential Drug List meant that pharmaceutical firms had more opportunity to influence selection, and may have been influenced by bribes. Procuring medicines at the provincial level saved 30–46 percent, yet corruption risks remain. Blacklisting requirements were poorly executed, and late data were less useful. These experiences with corruption reform show the need for more strategic and targeted efforts to address upstream causes of corruption, including reducing pressure in the workplace, increasing provider incomes, reforming hospital funding, and educating clinical staff in professional ethics. In addition, the government must invest resources to fully implement policies and address unintended effects. Source: Sullivan, 2018; Barboza, 2016; Zhu, Wang, & Yang, 2018; Jianwei Shi et al., 2018.

Addressing informal payments requires systems-level reform to health-financing mechanisms (e.g. increasing worker pay and/or pay-for-performance systems, allowing dual job holding in the private sector, instituting formal fees), plus transparency in benefit entitlement. In Armenia, the government was able to control informal payments in maternity care by introducing a voucher system. The voucher detailed the entitlement to services, and women were allowed to seek care at any facility. The facility was then reimbursed by the government at a set fee for the care. An evaluation showed that the reform reduced informal payments in rural areas; however, in the capital city of Yerevan, informal payments continued, possibly because the voucher reimbursement amount was not adjusted for the higher cost of care (Miller & Vian, 2010). Krygyzstan and certain hospitals in Cambodia also were able to reduce informal payments through systematic reforms addressing payment of workers, accountability, and transparency. Building relationships between providers and community members based on shared priorities, such as addressing lack of medicines, may shift power in ways that increase trust and reduce extorted payments.

GOVERNANCE Health governance ensures strategic policy frameworks that are supported by effective oversight, coalition building, regulation, system design, and accountability. Important governance activities include developing and implementing health policies and facilitating productive interactions among citizens, private organizations, and public officials. The health sector is complicated, and corrupt actors take advantage of this complexity to hide their malfeasance.

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124  Handbook on corruption, ethics and integrity in public administration Increasing citizens’ understanding about how the sector is organized and financed can help civil society to call attention to corruption risks. Transparency is an important lever to control corruption in governance. Three pathways by which transparency can be leveraged in the health sector include proactive dissemination of information, requester model, and complaint mechanisms or whistleblowing. Proactive dissemination of information refers to a government program to make information available without anyone having to request it. A good example in the health sector is the US Physician Payments Sunshine Act or the French Sunshine Act. These are public databases maintained by government where pharmaceutical and device companies are required to disclose gifts or benefits given to providers. Using data from the first full year, US researchers determined that manufacturers paid $1.9 million in 6,948 direct payments to gynecologic oncologists in 2014, mostly related to educational events and consulting fees (Shalowitz, Spillman, & Morgan, 2016). Open databases have the potential to deter physician–pharma interactions, and can be used by institutions to monitor clinicians’ adherence to policies meant to control conflicts of interest. A second pathway to transparency is the requester model where government responds to citizen requests for information through a Freedom of Information Act request or other such mechanism. For example, reporters or a non-governmental organization could request data on an official’s conflict-of-interest declarations, and records for how the official voted on an expert committee to set treatment guidelines, then analyze possible correlations. The requester model in Ukraine helped non-governmental organizations uncover procurement corruption and launch investigations that resulted in the disqualification of corrupt bidders (Anti-Corruption Action Centre, 2013). Subsequent reforms of the device procurement system in Ukraine resulted in much greater supply of stents, which according to some reports may have reduced cardiac deaths by 20 percent in affected regions (Bullough, 2018). Finally, complaint mechanisms and whistleblowing facilitate transparency by calling attention to negligence and abuse that threaten the public interest. According to the Association of Certified Fraud Examiners, hotlines are one of the most effective measures for fraud control, reducing losses by 50 percent or more (Tunley, Button, Shepherd, & Blackbourn, 2018). Yet, at the same time, the website Curbing Corruption observes that whistleblowing mechanisms may exist on paper only with inadequate whistleblower protections. The challenge is to make them effective within the country context (CurbingCorruption, 2019).

CONCLUSION We can fight corruption through specific detection strategies such as tracing embezzlement or identifying ghost workers, or through broader prevention strategies like increasing transparency and accountability, which may help limit discretion of officials and have a deterrent effect. With support from the United Kingdom Department for International Development, the WHO is advancing work on strengthening anti-corruption, transparency, and accountability in health systems in collaboration with the United Nations Development Programme and the Global Fund to Fight AIDS, TB, and Malaria. One of their first efforts has been to enhance the focus on anti-corruption, transparency, and accountability in assessment frameworks used in health systems and universal health coverage work (WHO, 2019a). Their report, now available

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Corruption and administration in healthcare  125 online, presents ways to measure risks of corruption using a health systems lens. The WHO also sponsored a special issue of the journal Global Health Action (2020, Vol. 13, Supp. 1) with academic and practitioner articles on corruption in the health sector, and has created a Global Network on Anti-Corruption, Transparency, and Accountability in Health Systems (WHO, 2019b). Corruption is a problem of corrupt institutions, not only corrupt individuals. We need to build capacity to analyze risks of corruption to set priorities. It is important to adapt interventions such as complaint mechanisms or fraud control programs to the specific country context. The goal should be to help everyone to recognize corruption as a barrier undermining the social determinants of health, and preventing us from achieving the goal of universal health coverage. To paraphrase Nobel Prize-winning economist Amartya Sen, we need to control corruption so that people have the freedom to live the kind of lives they want to live (Sen, 1999).

NOTE 1. A ghost worker appears on an employer’s payroll but does not actually work for the organization. Someone creates the ghost worker’s record in the payroll system, and then intercepts and cashes the paychecks intended for this (non-existent) person.

REFERENCES Abera, G. G., Alemayehu, Y. K., & Herrin, J. (2017). Public-on-private dual practice among physicians in public hospitals of Tigray National Regional State, North Ethiopia: perspectives of physicians, patients and managers. BMC Health Serv Res, 17(1), 713–20. Ambraseys, N., & Bilham, R. (2011). Corruption kills. Nature, 469(7329), 153–5. Anti-Corruption Action Centre. (2013). Who makes money on HIV/AIDS and tuberculosis in Ukraine: report. Kiev. Baghdadi-Sabeti, G., Cohen-Kohler, J., & Wondemagegnehu, E. (2009). Measuring transparency in the public pharmaceutical sector: assessment instrument. WHO/EMP/MAR/2009.4. Geneva. Barboza, D. (2016). Drug giant faced a reckoning as China took aim at bribery. New York Times, November 1. Retrieved from www​.nytimes​.com/​2016/​11/​02/​business/​international/​china​-rules​-glaxo​ -bribes​-sex​-tape​-whistleblower​-cautionary​-tale​.html on April 2, 2020. Belita, A., Mbindyo, P., & English, M. (2013). Absenteeism amongst health workers: developing a typology to support empiric work in low-income countries and characterizing reported associations. Human Resources in Health, 11, 34–43. Bertone, M. P., Martins, J. S., Pereira, S. M., Martineau, T., & Alonso-Garbayo, A. (2018). Understanding HRH recruitment in post-conflict settings: an analysis of central-level policies and processes in Timor-Leste (1999–2018). Human Resources in Health, 16(1), 66–77. Berwick, D., & Hackbarth, A. (2012). Eliminating waste in US health care. JAMA, 307(14), 1513–16. Bullough, O. (2018). How Ukraine is fighting corruption one heart stent at a time. New York Times, September 3. Retrieved from www​.nytimes​.com/​2018/​09/​03/​opinion/​ukraine​-corruption​-heart​-stents​ -procurement​.html on April 2, 2020. Collignon, P., Athukorala, P., Senanayake, S., & Khan, F. (2015). Antimicrobial resistance: the major contribution of poor governance and corruption to this growing problem. PloS One, 10(3), e0116746. Couffinhal, A., & Frankowski, A. (2017). Wasting with intention: fraud, abuse, corruption and other integrity violations in the health sector. In OECD (Ed.), Tackling wasteful spending on health (pp. 265–301). Paris: OECD Publishing.

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126  Handbook on corruption, ethics and integrity in public administration CurbingCorruption. (2019). Sector by sector reforms research and strategies: health. Retrieved from https://​curbingcorruption​.com/​sector/​health/​ on April 2, 2020. Davis, J. (2004). Corruption in public service delivery: experience from South Asia’s water and sanitation sector. World Development, 32(1), 53–71. Gaal, P., Belli, P. C., McKee, M., & Szocska, M. (2006). Informal payments for health care: definitions, distinctions, and dilemmas. Journal of Health Politics, Policy and Law, 31(2), 251–93. Gee, J., & Button B. (2015). The financial cost of healthcare fraud 2015: what data from around the world shows. London: PKF Littlejohn LLP. Gillanders, R. (2016). Corruption and anxiety in Sub-Saharan Africa. Economics of Governance, 17(1), 47–69. Habibov, N. (2016). Effect of corruption on healthcare satisfaction in post-soviet nations: a cross-country instrumental variable analysis of twelve countries. Social Science and Medicine, 152, 119–24. Hessari, N., Rusking, G., McKee, M., & Stuckler, D. (2019). Public meets private: conversations between Coca-Cola and the CDC. Millbank Quarterly, 97(1), 74–90. Hipgrave, D. B., & Hort, K. (2014). Dual practice by doctors working in South and East Asia: a review of its origins, scope and impact, and the options for regulation. Health Policy and Planning, 29(6), 703–16. Horodnic, A. V., Mazilu, S., & Oprea, L. (2018). Drivers behind widespread informal payments in the Romanian public health care system: from tolerance to corruption to socio-economic and spatial patterns. International Journal of Health Planning Management, 33(2), e597–e611. Jianwei Shi, J., Liu, R., Jiang, H., Wang, C., Xiao, Y., Liu, N., Wang, Z., & Shi, L. (2018). Moving towards a better path? A mixed method examination of China’s reforms to remedy medical corruption from pharmaceutical firms. BMJ Open, 8, e018513. Joudaki, H., Rashidian, A., Minaei-Bidgoli, B., Mahmoodi, M., Geraili, B., Nasiri, M., & Arab, M. (2014). Using data mining to detect health care fraud and abuse: a review of literature. Global Journal of Health Science, 7(1), 194–202. Khodamoradi, A., Ghaffari, M., Daryabeygi-Khotbehsara, R., Sajadi, H., & Majdzadeh, R. (2018). A systematic review of empirical studies on methodology and burden of informal patient payments in health systems. International Journal of Health Planning and Management, 33(1), e26–e37. Klitgaard, R. (1988). Controlling corruption. Berkley, CA: University of California Press. Kohler, J. C., Chang Pico, T., Vian, T., & Mackey, T. K. (2018). The global wicked problem of corruption and its risks for access to HIV/AIDS medicines. Clinical Pharmacology and Therapeutics, 104(6), 1054–6. Larkin, I., Ang, D., Steinhart, J., Chao, M., Patterson, M., Sah, S., Wu, T., Schoenbaum, M., Hutchins, D., Brennan, T., & Loewenstein, G. (2017). Association between academic medical center pharmaceutical detailing policies and physician prescribing. Journal of the American Medical Association, 317(17), 1785–95. Mackey, T., Vian, T., & Kohler, J. (2018). The sustainable development goals as a framework to combat health sector corruption. Bulletin of the World Health Organization, 96(9), 634–43. Miller, K., & Vian, T. (2010). Strategies for reducing informal payments. In T. Vian, W. Savedoff, & H. Mathisen (Eds), Anticorruption in the health sector: strategies for transparency and accountability (pp. 55–66). Sterling, VA: Kumarian Press. Mukasa, M. N., Sensoy Bahar, O., Ssewamala, F. M., KirkBride, G., Kivumbi, A., Namuwonge, F., & Damulira, C. (2019). Examining the organizational factors that affect health workers’ attendance: findings from southwestern Uganda. International Journal of Health Planning Management, 34(2), 644–56. Nayyar, G. M. L., Breman, J. G., Mackey, T. K., Clark, J. P., Hajjou, M., Littrell, M., & Herrington, J. E. (2019). Falsified and substandard drugs: stopping the pandemic. American Journal of Tropical Medicine and Hygiene, 100(5), 1058–65. Nguyen, T. A., Knight, R., Mant, A., Razee, H., Brooks, G., Dang, T. H., & Roughead, E. E. (2018). Corruption practices in drug prescribing in Vietnam: an analysis based on qualitative interviews. BMC Health Services Research, 18(1), 587–607. Onwujekwe, O., Agwu, P., Orjiakor, C., McKee, M., Hutchinson, E., Mbachu, C., Odii, A., Ogbozor, P., Obi, U., Ichoku, H., & Balabanova, D. (2019). Corruption in Anglophone West Africa health systems: a systematic review of its different variants and the factors that sustain them. Health Policy Planning.

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Corruption and administration in healthcare  127 Ozawa, S., Evans, D. R., Bessias, S., Haynie, D. G., Yemeke, T. T., Laing, S. K., & Herrington, J. E. (2018). Prevalence and estimated economic burden of substandard and falsified medicines in lowand middle-income countries: a systematic review and meta-analysis. JAMA Network Open, 1(4), e181662. Paredes-Solis, S., Villegas-Arrizon, A., Ledogar, R. J., Delabra-Jardon, V., Alvarez-Chavez, J., Legorreta-Soberanis, J., Nava-Aguilera, E., Cockcroft, A., & Andersson, N. (2011). Reducing corruption in a Mexican medical school: impact assessment across two cross-sectional surveys. BMC Health Services Research, 11 Suppl 2, S13. Paschke, A., Dimancesco, D., Vian, T., Kohler, J., & Forte, G. (2018). Increasing transparency and accountability in national pharmaceutical systems. Bulletin of the World Health Organization, 96, 782–91. Peixoto, S., Rocha, F., Nishijima, M., & Postali, F. (2012). Decentralization and corruption: evidence from primary health-care programmes. Applied Economics Letters, 19(18), 1885–8. Radin, D. (2009). Too ill to find the cure? Corruption, institutions, and health care sector performance in the new democracies of Central and Eastern Europe and Former Soviet Union. Eastern European Politics and Societies, 23(1), 105–25. Radin, D. (2013). Does corruption undermine trust in health care? Results from publicopinion polls in Croatia. Social Science and Medicine, 98, 46–53. Rashidian, A., Joudaki, H., & Vian, T. (2012). No evidence of the effect of the interventions to combat health care fraud and abuse: a systematic review of literature. PloS One, 7(8), e41988. Renschler, J., Walters, K., Newton, & Laxminarayan, R. (2015). Estimated under-five deaths associated with poor-quality antimalarials in Sub-Saharan Africa. American Journal of Tropical Medicine and Hygeine, 92(6 Suppl), 119–26. Savedoff, W., Glassman, A., & Madan, J. (2016). Global health, aid and corruption: can we escape the scandal cycle? CGD Policy Paper 086. Washington, DC. Schaaf, M., & Topp, S. (2019). A critical interpretive synthesis of informal payments in maternal health care. Health Policy and Planning, 34(3), 216–29. Sen, A. (1999). Development as freedom. New York: Anchor Books. Shalowitz, D., Spillman, M., & Morgan, M. (2016). Interactions with industry under the Sunshine Act: an example from gynecologic oncology. American Journal of Obstetrics and Gynecology, 214(6), 703–7. Sullivan, T. (2018). GSK Chinese bribery scandal ends in $489 million fine, executive sentenced. Policy and Medicine. Retrieved from www​.policymed​.com/​2014/​09/​gsk​-chinese​-bribery​-scandal​-ends​-in​ -489​-million​-fine​-executive​-sentenced​.html on April 2, 2020. Teik Hua, L., Noland, R., & Evans, A. (2010). The direct and indirect effects of corruption on motor vehicle crash deaths. Accident Analysis and Prevention, 42, 1934–42. Tringale, K., Marshall, D., Mackey, T., Connor, M., Murphy, J., & Hattangadi-Gluth, J. (2017). Types and distribution of payments from industry to physicians in 2015. Journal of the American Medical Association, 317(17), 1774–84. Tunley, M., Button, M., Shepherd, D., & Blackbourn, D. (2018). Preventing occupational corruption: utilizing situational crime prevention techniques and theory to enhance organizational resilience. Security Journal, 31(1), 21–52. Usher, A. D. (2010). Donors lose faith in Zambian Health Ministry. The Lancet, 376(9739), 403–4. Walkowiak, H., Hafner, T., & Putter, S. (2018). Strengthening governance in pharmaceutical systems: a compendium of country case studies. Arlington, VA: Management Sciences for Health. Wells, J. (2011). Principles of Fraud Examination. Hoboken, NJ: John Wiley & Sons. Wisniewski, C., Robert, S., & Ball, S. (2014). Collaboration between a drug information center and an academic detailing program. American Journal of Health-System Pharmacy, 71(2), 128–33. World Health Organization (WHO). (2007). Everybody’s business: strengthening health systems to improve health outcomes: WHO’s framework for action. Geneva: World Health Organization. Retrieved from www​.who​.int/​healthsystems/​strategy/​everybodys​_business​.pdf on April 20, 2020. World Health Organization (WHO). (2016). WHO global strategy on human resources for health: workforce 2030. Geneva: WHO. World Health Organization (WHO). (2019a). Integrating a focus on anti-corruption, transparency and accountability in health systems assessments. Geneva: WHO.

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128  Handbook on corruption, ethics and integrity in public administration World Health Organization (WHO). (2019b). Tackling corruption in the health sector to leave no one behind. Retrieved from www​.who​.int/​gender​-equity​-rights/​news/​anti​-corruption​-transparency​ -accountability​-in​-health​-systems/​en/​ on April 2, 2020. Zhu, W., Wang, L., & Yang, C. (2018). Corruption or professional dignity: an ethical examination of the phenomenon of “red envelopes” (monetary gifts) in medical practice in China. Developing World Bioethics, 18, 37–44.

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10. Corruption in the education sector Stephen P. Heyneman

BACKGROUND Corruption in the education sector differs from corruption in health care, police, courts, industry, banking and agriculture in two respects. For the most part, the education sector involves children and young adults. When for private gain, children and young adults bypass the rules and official norms, the experience has ramifications for them as adults and for the wider community to which they belong. Second, educational institutions are consciously constructed as places where the official norms are supposed to apply. The official norms in education, as in health (do no harm), are universal. They include fairness to all, entrance to elite forms of training on the basis of achievement, and adherence to good behavior in classrooms, cafeterias, playgrounds, hallways, toilets, in transportation to and from home and on school outings (Heyneman, 2000). Schools are designed to be a microcosm of the good society. While banking and agriculture have norms and expectations, in the education sector these norms and expectations are key to the educational architecture. Hence, the implications of the education sector’s corruption can be more serious. The definition of education corruption derives from the more general set of corruption issues. Like other areas, it includes the abuse of authority for material gain (Anechiarico and Jacobs, 1996; Kalnins, 2001; Frimpong and Jacques, 1999). But because education is an important public good, its professional standards include more than just material goods; hence the definition of education corruption also includes the abuse of authority for professional prestige as well as material gain.

WHY IS EDUCATION CORRUPTION IMPORTANT? Since the time of Plato, it has generally been understood that a key ingredient in the making of a nation/state is how it chooses its technical, commercial and political leaders. In general it is agreed that no modern nation can be legitimate if leaders are selected on the basis of ascriptive characteristics, the characteristics with which they are born – race, gender, social status. On the other hand it is usual for families to try to protect and otherwise advantage their own children and relatives. Every parent wishes success for his own child; every group wishes to see success of children from their particular group. This is normal. Schooling provides the mechanism through which these opposing influences can be managed fairly. It is the common instrument employed by nations to ‘refresh’ their leadership. Economists have tried to estimate the sacrifice to economic growth if there is substantial bias in the selection of its leaders (Klitgaard, 1986). Some suggest that developing countries could improve their gross domestic product/capita by 5 percent if they were to base the selection of leaders upon merit as opposed to gender or social status (Piñera and Selowsky, 1981). By some estimates, choosing leaders on the basis of merit would benefit developing countries three 129 Stephen P. Heyneman - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:38PM via The University of British Columbia Library

130  Handbook on corruption, ethics and integrity in public administration times more than would reducing Organisation for Economic Co-operation and Development (OECD) trade restrictions on imports (Kirmani et al. 1984). Success in schooling is one of the few background characteristics seen as necessary for modern leadership. Although it is possible for leaders to emerge through experience, privilege or good fortune, nevertheless, getting ahead in schooling is itself commonly treated as essential. But what if schooling itself is not fair? What if the public comes to believe that the provision of schooling favors one social group? What if the public does not trust the judgment of teachers on student performance? What would happen if the process of schooling had been corrupted? The fact is that, in a democracy, the public takes a very active interest in the fairness of its education system (Heyneman, 2010a; 2011; 2013). If the public does not trust the education system to be fair, more than economic growth may be sacrificed. It might be said that current leaders, whether in commerce, science or politics, had acquired their positions through privilege rather than achievement (Anechiarico and Jacobs, 1996; Frimpong and Jacques, 1999). If the school system cannot be trusted, it may detract from a nation’s sense of social cohesion, a principal ingredient of sustainable societies (Heyneman, 2000).

THE CHARACTERISTICS OF AN EDUCATION SYSTEM FREE OF CORRUPTION Free of corruption, a school system is characterized by an equality of educational opportunity, fairness in the distribution of curricula (such as access to preparation for tertiary education) and materials, fairness and transparency in the criteria for tertiary education selection, fairness in the accreditation in which institutions are given license to operate, balance and generosity in the treatment of less powerful citizens and geographical neighbors, maintenance of professional conduct by those who administer educational institutions and who teach in them, whether public or private. Some elements of education corruption are identical to the corruption found in other sectors. Procurement may be decided on the basis of secret bribes paid to administrators, similar to construction projects in highways, ports, industry or hospitals. Taxation on property or income may be changed because of private arrangements with public officials parallel to what may occur in the commercial sector.1 Salaries may be paid to non-existent employees, with managers pocketing the checks (Reinikka and Svensson, 2004; Hubbard, 2008), similar to what may occur in other sectors such as the military where salary recurrent expenditures are a major budget item. Public-sector budget allocations may be distorted by favoring sectors which offer more opportunity for bribes and kickbacks. This advantages sectors heavy on capital infrastructure (Jajkowiez and Drobiszova, 2015; Mauro, 1998; Delavallade, 2006). Permission to operate may be granted to universities on the basis of secret payments to accreditation authorities just as licensing may be granted to commercial enterprises on the basis of secret payments to public officials (Heyneman, 2010a; 2011; 2013). In these instances, education sector corruption is not significantly different from corruption in other sectors. Hence its governing authority are courts of law and normal legal structures. But a large part of education sector corruption is particular to the sector and is not governed by legislation and courts. These elements concern the corruption of professional ethics (Braxton and Bayer, 1999, p. 137) and may include: accepting of material gifts in exchange

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Corruption in the education sector  131 for positive grades, assessments or selection to specialized programs, assigning grades on the basis of a student’s race, social class or other ascriptive characteristics, insisting on a student’s adopting of an instructor’s values or philosophy,2 disclosing student confidential information, sexually or otherwise exploiting, harassing or discriminating against particular students,3 adopting text or other educational materials on the basis of bribes from manufacturers, forcing students to purchase materials copyrighted by the instructor4 and utilizing school property for personal profit.5 Definitions of faculty misconduct may differ from one country to another. In some it is common for teachers to accept payment for allowing students to proceed to the next grade. This is particularly common in Latin America (Heyneman, 2004). In some countries it is common for teachers to offer after-school tutoring for a price, and to suggest that students might fail if they do not pay for after-school tutoring (Dawson, 2009). In some countries, faculty may operate a ‘private’ school in after-school hours, hence using public property for private gain. In some instances, a school administrator or university rector may rent school property, or use it for manufacturing or agriculture commerce and not report the income (Heyneman, 2000). Where misconduct constitutes a criminal offence it can be judged through the criminal court system. But professional misconduct must be judged by the profession itself, as in law or medicine. A teacher bias against a certain category of student, payments for a grade and plagiarism in research publications are examples where adjudication has to be done through strong professional boards with the authority to fine and dismiss. In essence, the range of corruption in the education sector is quite diverse. It may be helpful for us to concentrate on one specific aspect: the act of a higher education student bribing a department head for admission to a program or a teacher to obtain a specific grade.

BRIBERY: ONE ASPECT OF EDUCATION CORRUPTION In one way or another education-sector corruption is universal, but some forms are common in some parts of the world and unknown in others (Heyneman, 2010a; 2014b). Though gate keepers to scarce goods may generate the temptation to use the allocation function for private gain, education bribery is common in the former Soviet Union, South Asia and Sub-Saharan Africa, but not in OECD countries (Transparency International, 2005; 2013; Heyneman, 2004). For example, in a survey of university students, 76 percent in Moldova said they would cheat on an examination if they would not get caught, and 80 percent in Bulgaria admitted that they would not feel bad if they cheated. Thirty-six percent of the university students surveyed in Serbia believed that faculty would change a grade for a price and 45 percent believed that students could pay to gain admission to their university. Sixty-four percent of the surveyed students at the National State University in Kyrgyzstan thought that their university was ‘bribable’. When displayed by subject of study, the fields with the highest probability of accepting bribes were in law, economics and management (Heyneman, 2007a). Education Bribery and General Corruption in the Public Sector It is suggested that bribery thrives where salaries are inadequate (Chene, 2009; New Republic, 2015; de Graaf, 2007; Gov.UK, 2015). And to be sure, the association between low salaries and bribery is reasonable to assume. But although low salaries may increase the pressure

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132  Handbook on corruption, ethics and integrity in public administration on individuals to bypass professional standards, it does not negate the need for professional standards. It is also the case that bribery is higher in those fields in which salaries are higher to begin with (Heyneman, 2004; Heyneman et al., 2008) and where labor market prospects for graduates are higher (Teixeira and Roacha, 2006; Hrabak et al., 2004; Kerkvliet, 1994; Nowell and Laufer, 1997). It is also suggested that bribery thrives where professional institutions and sanctions are weak, where regulations are not transparent and where there is a culture of permission (Heath et al., 2016). In countries where these elements accurately describe the public sector generally, corruption in the education sector follows (Patico, 2002; Transparency International, 2013). When a great effort was made in Georgia to root out corruption in the police, investments were made in new police stations made of glass walls. This was to illustrate that the public was welcome to see what was going on inside. Simultaneously, an effort was made to shift university admission mechanisms away from face-to-face oral exams to a standardized examination with practice questions widely distributed in rural areas. Results were parallel: the public began to perceive the police differently and children of the poor and from rural areas began to enter universities in large numbers (Heyneman, 2009). How Are Education Bribes Paid? What Actually Happens? Professors may let students know the ‘price’ for a particular grade and prices for entry to particular graduate programs are circulated anonymously, occasionally on social media. Payments can be made by leaving cash-filled envelopes on faculty desks; the admission’s office may have a particular person with the informal assignment of collecting envelopes. Librarians collect bribes to keep required readings available for students who pass envelopes to them. Student housing is allocated by departments and because many universities are situated in high-priced cities having access to student housing is a tradable commodity. Although courses may be completed, signatures are required for the granting of course credits and for degrees. Signatures are withheld until an envelope appears (Heyneman, 2004). In 2006 support was received to privately interview faculty members in Kazakhstan, Georgia and Kyrgyzstan. Among the questions asked concerned whether they had participated in an act of bribery and, if so, how did it make them feel? Although some were clearly nervous about the question, only three (out of 111) respondents refused to allow a tape recording of their answers. One senior professor at Tbilisi State University in Georgia laid out what he considered the recent history of bribery at his university: Admissions were a way to make money, huge money. But once inside the university, corruption depended upon the department. It was worse in law and business and economics. No one in his right mind would study math or physics if he is corrupt. If you go into math or physics there is no work, no jobs, so we get only highly motivated students. (Heyneman, 2007b, p. 313)6

One professor from East Kazakhstan University recalled his experience: When I was a student I did not know what corruption was. But then I got to Almaty [the capital] and I found out. When I wrote my thesis I faced many difficulties. It took me seven years to defend my thesis. I had to go back again and again and again to get the signature of the committee chair. I did not pay but I know that it would have been expedited if I had paid a bribe. (Heyneman, 2007b, p. 313)

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Corruption in the education sector  133 The worst occasions of ‘moral terrorism’ occur when a faculty colleague or senior administrators request that a grade is changed for a particular student. From Tbilisi State University, for instance, one faculty member related the following: ‘The worst are my colleagues who put pressure on me… and the worst are colleagues who were our former teachers… even the dean puts pressure… It makes me feel pretty bad… the most corrupt are the most influential. It is very difficult’ (Heyneman, 2007b, p. 313). And an example from a young female faculty member at East Kazakhstan State: Once the dean called me about a grade for a daughter of the vice rector. The vice rector had been removed from his position and was in the hospital. The dean said that the vice rector had already suffered and let’s not make him suffer any more, so give his daughter a good grade. After I gave her a good grade, I suffered.

Many faculty members described participating in an act of bribery as making them ‘feel terrible’. Several ended up in tears and the interview had to be postponed. One woman said that bribery made her ‘feel violated’. But then others had rationalizations. One faculty member said that when she changed a grade she knew ‘someone had benefited’. ‘I did something good for someone else even though I suffered.’ Another said: For a while I had a firm position about changing grades. But I was making a lot of enemies. Now I try to meet the requests half way. I still make the student study, but I will give him a good grade. I will give a student an easy assignment to complete and then give him/her a good grade. I get phone calls and direct requests. On the inside I know I am not doing the right thing. (Heyneman, 2007b, p. 314)

Reforms such as standardized examinations have helped to reduce the level of corruption in admissions. One faculty member at Tbilisi State said that: ‘Because of standardized exams… many things have changed. Students from rural areas and poor homes are more numerous. When bribery was necessary to enter the university, these students had no chance to enter.’ The problem is not that bribery can be overcome with new innovations, but that it can re-emerge once techniques to bypass new safeguards are found. One pointed out that: ‘After two years, each college student takes an internal exam designed by the ministry of education. For the first several years it operated fairly. But now it too has become corrupted. Cell phones and cheat sheets are allowed into the test for a price’ (Heyneman, 2007b, p. 314). Adverse Effects of Higher Education Bribery That education corruption has adverse consequences has never been in doubt but some have pointed out that not all consequences are adverse. Sociologists have noted that cultural and traditional customs such as honoring one’s teacher with a gift of appreciation may be misinterpreted (Patico, 2002). These have had to be redefined so that a line can be drawn between what constitutes corruption and what constitutes normal social behavior (Heyneman, 2010b). Others have suggested that payments to teachers and health workers may help them advance in social status (Morris and Polese, 2016). Some have argued that corruption can be efficiency-improving in those instances where prices (tuition, fees or wages) are distorted by regulation or lags in application, though this point of view has been challenged when consumers have to reapply continuously for permits and licenses (Ahlin and Bose, 2007). Efficiency goals fail if a university acquires a reputation for having faculty or administrators who accept

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134  Handbook on corruption, ethics and integrity in public administration bribes for entry, grades or graduation. The power of a university with this reputation will suffer from labor market challenges. This is particularly the case with private enterprises which draw on international labor markets. Some too have argued that the perception of corruption is not the same as actual corruption and that the differences may be significant (Charron, 2016). In doing research on higher education corruption in Central Asia we were able to estimate the effect on private and social economic returns to education investment.7 If students purchase grades they have less incentive to learn the material. Advancement is less associated with knowledge and the acquisition of skill than wealth and the ability to pay for ‘achievement’. The private and social returns to education are degraded. The signaling function of a degree is also reduced. Completion of education cannot be closely linked to the ability of a student if entry into programs and high grades are for sale. The employer does not know whether the student completed the program and did well because h/she was a high-ability, low-cost student or because h/she acquired grades illegally or unfairly. Even if an individual student is free of corruption but has attended an institution with corruption reduced, the value of the degree is reduced. An employer with a choice of candidates reduces the risk of hiring an unproductive employee by avoiding graduates of corrupt institutions and programs and only hiring students from institutions or departments with a reputation for honesty. For this employer to hire a student from a corrupt program, the student would have to accept a significantly lower salary and prove his/her economic value to the employer through on-the-job experience over time. Corruption at the undergraduate level affects the probability that a student may obtain a graduate degree. Graduate programs, particularly in universities situated in OECD countries, discount applicants from institutions in which corruption is perceived as common. Applicants from corrupt programs are less likely to be selected because grades and test scores do not represent their ability to do graduate work. Corruption adversely affects the relative ability of higher education to keep people out of poverty over their working lifetime. This effect is evident in all regions but is most pronounced in the Europe and Central Asia region. Corruption in higher education changes the ability of education to maintain employment and increase income. The cost to a student who attends a university characterized by a high level of corruption is equivalent to sacrificing the economic impact of higher education quality.

RESPONSES TO HIGHER EDUCATION CORRUPTION Honesty in higher education depends on the strength of professional character within individuals and institutions. Even in the most adverse environments, where bribery and competition for personal advantage is the norm, there are numerous resisters who refuse to participate (Heyneman, 2009). However, resisters acting as individuals are not sufficient. Fortunately there are three categories of pressure on higher education institutions which may help lower the risk of a corruption culture becoming endemic (Heyneman, 2017). The first is the shift away from having universities provide professional licenses to practice in the professions. Because bribery tends to be greater in the highly rewarded professions of medicine, law and economics (Kerkvliet, 1994; Hrabak et al., 2004; Heyneman, 2017) and because the existence of for-profit universities is close to universal, continuing to have all universities provide the license to practice exposes the public to unqualified pilots, architects and doctors. Having a professional institution, such as a bar or medical association, award the

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Corruption in the education sector  135 license to practice lowers the risk to the public. In turn, this lowers the demand to bribe university faculty by students who need a license to practice a profession (Heyneman and Lee, 2013). The second is the influence of international organizations and international norms in the comparing of degrees and programs of training. Among the most well known is the Bologna Process in which universities in the 28 countries of Eastern and Central Europe aspire to be recognized as the equivalent of university programs in Western Europe. If not carefully monitored the criteria for equivalence, for instance between a program at East Kazakhstan State University and the London School of Economics, could lead to a decline in the latter’s value. This tends to place new demands on the Bologna Process by reason of the high stakes involved. And it offers the opportunity to insert the necessary criteria of ‘equivalence’ to incentivize applicant institutions (Maricik, 2009; Bergan, 2009; Sahlberg, 2009; Heyneman and Skinner, 2014). The third influence is that of international competition for excellence. Universities are under a great deal of pressure to bring themselves up to international standards. Much has been written about the various systems of ranking the quality of universities, but one side effect of international ranking has been relatively unnoticed and that is how broad the demand is to change behavior within local institutions. One characteristic of world-class universities is that,8 in whatever country they are situated, all address the issue of corruption directly in their advertisements. Perhaps most importantly, the University of Tokyo, Harvard and the London School of Economics all showcase what they do to combat corruption. World-class universities assume that corruption exists, including at their institutions, and all specify in detail the countermeasures they are actively taking. Universities in countries where corruption is highest tend to ignore the problem. They do not mention anything about it in their advertisements on the grounds that there is no evidence that they have a corruption problem. World-class universities take the position that they could be guilty of the problem and that is why they are combatting it (Heyneman, 2014a). There are many influences on universities which may counteract the tendency to accept the normalcy of bribes and unprofessional standards, but the following may be the most powerful: the professionalization of the licensing process, the pressure to be compared to universities in other parts of the world and competition for world-class status.

NOTES 1. The distinction between non-profit and for-profit educational institutions is not clear in many parts of the world. What in some cases would be treated as legitimate cost recovery might in other cases be categorized as taxable income (Heyneman et al., 2008; Heyneman and Skinner, 2014). 2. This latter issue tends to be true of education systems in OECD countries. 3. Sexual harassment in classrooms may be more common in Sub-Saharan Africa than other regions (Bakari and Leach, 2009; Collins, 2009). 4. Common in the Europe and Central Asia region: faculty will not allow students to sit for a final exam without showing proof of purchase of the faculty member’s publication. 5. Examples: using a public classroom to operate a private for-profit school or selling student products for personal profit. 6. Mathematics and sciences were popular subjects of study in the Soviet Union. When labor markets were administered by the state, there was no unemployment. However, once labor markets were freed and industry was privatized, the economic returns to studying traditional subjects collapsed (Heyneman, 2000).

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136  Handbook on corruption, ethics and integrity in public administration 7. Adapted from Heyneman et al., 2008. 8. ‘World class’ is defined as those universities which appear on the list distributed by the Times Education Supplement of the best in the world (Heyneman, 2014a).

REFERENCES Ahlin, C. and Bose, P. (2007) ‘Bribery, Inefficiency and Bureaucratic Delay’, Journal of Development Economics 84 (1), pp. 465–86. Anechiarico, F. and Jacobs, J.B. (1996) The Pursuit of Absolute Integrity: How corruption control makes government ineffective. Chicago, IL: University of Chicago Press. Bakari, S. and Leach, F. (2009) ‘“I Invited Her in to My Office”: Normalizing Sexual Violence in a Nigerian College of Education’, pp. 9–23 in S.P. Heyneman (ed.), Buying Your Way into Heaven: Education and corruption in international perspective. Rotterdam: Sense Publishers. Bergan, S. (2009) ‘The European Higher Education Area as an Instrument of Transparency?’, pp. 121–5 in S.P. Heyneman (ed.), Buying Your Way into Heaven: Education and corruption in international perspective. Rotterdam: Sense Publishers. Braxton, J.M. and Bayer, A.E. (1999) Faculty Misconduct in Collegiate Teaching. Baltimore, MD: Johns Hopkins University Press. Charron, N. (2016) ‘Do Corruption Measures Have a Perception Problem? Assessing the Relationship between Experiences and Perceptions of Corruption among Citizens and Experts’, European Political Science Review 80 (1), pp. 147–71. Chene, M. (2009) ‘Low Salaries, the Culture of per diems and Corruption’, U4Expert Answer, Transparency International, November. Collins, J.M. (2009) ‘When Schools Fail to Protect Girls: School-Related Gender-Based Sexual Violence in Sub-Saharan Africa’, pp. 23–50 in S.P. Heyneman (ed.), Buying Your Way into Heaven: Education and corruption in international perspective. Rotterdam: Sense Publishers. Dawson, W. (2009) ‘The “Tricks of the Teacher”: Shadow Education and Corruption in Cambodia’, pp. 51–75 in S.P. Heyneman (ed.), Buying Your Way into Heaven: Education and corruption in international perspective. Rotterdam: Sense Publishers. de Graaf, G. (2007) ‘Causes of Corruption: Towards a Contextual Theory of Corruption’, Public Administration Quarterly 31 (12, Spring–Summer), pp. 39–86. Delavallade C. (2006) ‘Corruption and Distribution of Public Spending in Developing Countries’, Journal of Economics and Finance 30 (2), pp. 222–39. Frimpong, K. and Jacques, G. (1999) Corruption, Democracy and Good Governance in Africa: Essays on accountability and behavior. Gaborone: Lighthouse. Gov.UK (2015) ‘Do Higher Salaries Lower Petty Corruption?’ www​.gov​.uk/​dfid​-research​-outputs/​ do​-higher​-salaries​-lower​-petty​-corruption​-a​-policy​-experiment​-on​-west​-africa​-s​-highways, accessed April 2, 2020. Heath, A.F., Richards, L. and de Graaf, N.D. (2016) ‘Explaining Corruption in the Developing World: The potential of sociological approaches’, Annual Review of Sociology 42, pp. 51–79. Heyneman, S.P. (2000) ‘From the Party-State to Multiethnic Democracy: Education and Social Cohesion in the Europe and Central Asia Region’, Educational Evaluation and Policy Analysis 22 (2, Summer), pp. 173–93. Heyneman, S.P. (2004) ‘Education and Corruption’, International Journal of Education Development 24 (6), pp. 638–48. Heyneman, S.P. (2007a) ‘Buying Your Way into Heaven: The Corruption of Education Systems in Global Perspectives’, Perspectives on Global Issues 2 (1, Autumn), pp. 1–8. Heyneman, S.P. (2007b) ‘Three Universities in Georgia, Kazakhstan and Kyrgyzstan: The Struggle against Corruption and for Social Cohesion’, UNESCO Prospects 3 (September), pp. 305–18. Heyneman, S.P. (2009) ‘Moral Standards and the Professor: A Study of Faculty at Universities in Georgia, Kazakhstan and Kyrgyzstan’, in S.P. Heyneman (ed.), Buying Your Way into Heaven: Education and corruption in international perspective. Rotterdam: Sense Publishers.

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Corruption in the education sector  137 Heyneman, S.P. (2010a) ‘The Concern with Corruption of Ethics in Higher Education,’ pp. 13–27 in T.B. Gallant (ed.), Creating the Ethical Academy: A systems approach to understanding misconduct and empowering change. New York: Routledge and Kegan Paul. Heyneman, S.P. (2010b) ‘Introduction’, pp. 13–16 in E. Kazimzade and E. Lepisto (eds), Drawing the Line: Parental Informal Payments across Eurasia. New York: Open Society Institute. Heyneman, S.P. (2011) ‘The Corruption of Ethics in Higher Education’, International Higher Education 62 (Winter), pp. 8–9. Heyneman, S.P. (2013) ‘Higher Education Institutions: Why they Matter and why Corruption Puts Them at Risk’, Global Corruption Report: Education, Transparency International: New York: Routledge. Heyneman, S.P. (2014a) ‘The Ethical Underpinnings of World Class Universities’, pp. 205–17 in J.C. Shin and U. Teichler (eds), The Future of the Post-Massified University at the Crossroads: Restructuring systems and functions. New York: Springer. Heyneman, S.P. (2014b) ‘How Corruption Puts Higher Education at Risk’, International Higher Education, 75 (Spring), pp. 2–3. Heyneman, S.P. (2017) ‘Higher Education and Corruption: What have we learned?’, International Association of Universities Horizons 11 (1, May), pp. 32–3. Heyneman, S.P. Anderson, K.H. and Nuraliyeva, N. (2008) ‘The Cost of Corruption in Higher Education’, Comparative Education Review 51 (2), pp. 1–25. Heyneman, S.P. and Lee, J. (2013) ‘World Class Universities: The sector requirements’, pp. 45–59 in J.C. Shin and B. Kehm (eds), Internationalization of World Class Universities in Global Competition. New York: Springer. Heyneman, S.P. and Skinner, B. (2014) ‘The Bologna Process in the Countries of the Former Soviet Union: An Outsider’s Perspective’, Journal of European Higher Education Area: Policy, Practice and Institutional Engagement 1, pp. 55–73. Hrabak, M., Vujaklija, A., Vodopivec, I., Hren, D., and Marusic, A. (2004) ‘Academic Misconduct among Medical Students in a Post-Communist Country’, Medical Education 38 (3), pp. 276–85. Hubbard, P. (2008) ‘Putting the Power of Transparency in Context: Information’s Role in Reducing Corruption in Uganda’s Education Sector’, Social Science Research News Solutions, March. Jajkowiez O. and Drobiszova, A. (2015) ‘The Effect of Corruption on Government Expenditure Allocation in OECD Countries’, Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis 63 (4), pp. 1251–9. Kalnins, V. (2001) Latvia’s Anticorruption Policy: Problems and prospects. Riga: Soros Foundation. Kerkvliet, J. (1994) ‘Cheating by Economics Students: A comparison of survey results’, Journal of Economic Education 25 (2), pp. 121–51. Kirmani, N. et al. (1984) ‘Effects of Increased Market Access on Exports of Developing Counties’, IMF Staff Paper 31 (4). Klitgaard, R. (1986) Elitism and Meritocracy in Developing Countries. Baltimore, MD: Johns Hopkins University Press. Maricik, B. (2009) ‘Models of Corruption and How Students Could Respond: Corruption Experienced by the Students During their Studies in Macedonia and their Anti-corruption Measures’, pp. 109–21 in S.P. Heyneman (ed.), Buying Your Way Into Heaven: Education and corruption in international perspective. Rotterdam: Sense Publishers. Mauro, P. (1998) ‘Corruption and the Composition of Government Expenditure’, Journal of Public Economics 69, pp. 263–79. Morris, J. and Polese A. (2016) ‘Informal Health and Education Sector Payments in Russian and Ukrainian Cities: Structuring Welfare from Below’, European Urban and Regional Studies 23 (3), pp. 481–96. New Republic (2015) ‘Low Salaries Blamed on Corruption in the Education Sector’, June 3. Nowell, C. and Laufer, D. (1997) ‘Undergraduate Student Cheating in the Fields of Business and Economics’, Journal of Economic Education 28, pp. 3–12. Patico J. (2002) ‘Chocolates and Cognac: Gifts and the Recognition of Social Worlds in Post-Soviet Russia’, Ethnos 67 (3), pp. 345–68. Piñera, S. and Selowsky, M. (1981) ‘The Optimal Ability Education Mix and the Misallocation of Resources within Education’, Journal of Development Economics 8 (1), pp. 111–31.

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138  Handbook on corruption, ethics and integrity in public administration Reinikka, R. and Svensson, J. (2004) ‘Local Capture: Evidence from a Central Government Transfer Program in Uganda’, Quarterly Journal of Economics 119 (2, May), pp. 679–705. Sahlberg, P. (2009), ‘The Role of International Organizations in Fighting Education Corruption’, pp. 135–55 in S.P. Heyneman (ed.), Buying Your Way into Heaven: Education and corruption in international perspective. Rotterdam: Sense Publishers. Teixeira, A.A.C. and Roacha, M.F. (2006) ‘Academic Cheating in Austria, Portugal, Romania, and Spain: A Comparative Analysis’, Research in Comparative and International Education 1 (3), pp. m198–209. Transparency International (2005) Stealing the Future: Corruption in the classroom. Berlin: Transparency International. Transparency International (2013) Global Corruption Report: Education. London: Transparency International.

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11. Corruption and administration in local government Allan Yates

INTRODUCTION This chapter explores particularism, as a form of administrative corruption that is relatively underconsidered, yet potentially extensive within the local government sector in New South Wales, Australia. Within the context of corruption, this chapter examines what particularism is and why it is a challenging practice to identify and govern. It goes on to explore how potentially widespread particularism is within the New South Wales local government, yet how potentially interwoven it is within the fabric of culture and practice. Particularism is a form of behaviour that ‘covers all personnel decisions in the working life of an employee, such as recruitment, selection, promotion and rewards, and circumvents objective or standard procedures’ (Hudson et al., 2017, p. 2). Similar, albeit more specific terms, such as nepotism and cronyism, feature interchangeably within the literature on corruption. Pope (2000, p. 197) refers to nepotism as a practice where a person in a position of power or influence favours a member of his or her family, usually to obtain a job, while cronyism covers situations where a preference is ‘given to friends and colleagues’. The determinants of each are analogous and are referred to within this chapter as particularism. If a council culture is based on particularism, the appointment and advancement of personnel is based on connections rather than merit (Mungiu-Pippidi, 2017, p. 9). In the local government setting, the outcome of such decisions might not necessarily be in accordance with the best interests of the council and the community it serves.

‘SAME SAME’, BUT DIFFERENT Bribery, nepotism and cronyism feature heavily in the discourse of corruption, as forms of corruption, or examples of corrupt practices (Andvig et al., 2000, p. 14; Mulgan, 2012, p. 25), but each is vastly different in its composition. Corruption is often considered to be synonymous with bribery (Johnston, 2005, p. 6). Zimring and Johnson (2005, p. 802) refer to acts such as bribery as being ‘crude and visible’ and distinctly different to ‘subtle and hidden abuses’, such as conflict of interest and particularism, which they term the ‘dark figure of corruption’ (Zimring & Johnson, 2005, p. 802). The authors contend that there is a ‘larger proportion of corrupt acts in complex and developed societies than in less developed nations’, which they attribute to ‘the adaptive tendency to hide higher-status offending in developed nations’ (Zimring & Johnson, 2005, pp. 802–3). The subtle, hidden and complex nature of corrupt activities, such as particularism, make it less easy to designate as ‘corrupt’. Unlike bribery, particularism does not have an immediate exchange (Heidenheimer, 2009, p. 141) or an immediate economic benefit (Masters & Graycar, 2015, p. 165). Many countries leg139 Allan Yates - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:42PM via The University of British Columbia Library

140  Handbook on corruption, ethics and integrity in public administration islate against some acts of corruption, such as bribery, but do not legislate against acts such as conflict of interest and particularism (Graycar & Villa, 2011, pp. 435–6). Hence, they are not illegal per se, and do not have obvious materialities. In this regard, anti-corruption efforts need to be cognisant of the different ways in which corruption can manifest and to recognise how the determinants of corrupt conduct differ. As argued by Heywood (2017, p. 28), ‘most anti-corruption efforts are bound to fail unless we can find more effective ways of unpacking the problem we are seeking to address’. In this regard, it is worth heeding salient observations by Anechiarico (2009, p. 84), who contends that ‘a notable failing of public administration has been reliance on the law enforcement model for the control of corruption’. Any anti-corruption effort which follows the law enforcement model is fraught in this regard. There are many practices and behaviours, which might be construed as corrupt, that are not unlawful. However, they still fall within the definition of ‘abuse of entrusted power for private gain’, this being one of the most influential definitions of corruption the world over (Transparency International, 2018). Hence, when one seeks to understand more about the rich complexities associated with corruption – especially within the local government setting, where the appointment, promotion and recruitment of personnel is fundamental to the organisation’s overall success – there would arguably be latent implications if an appointment decision is consciously influenced by an individual’s preference or partiality. This would not necessarily be obvious or overt at the time of appointment or promotion. The appointment decision may seem innocuous or benign, as there are no obvious detrimental or tangible materialities. There may be times when the appointee is not an active party in the transaction as the decision is made wholly by the appointer. Within the scholarly domain, the relationship between particularism, the informality of institutions and higher organisational corruption is considered to be ‘theoretically underdeveloped, since the precise mechanisms underlying the causal link between particularism and corruption have not been fully understood’ (Rotondi & Stanca, 2015, p. 220). Even though particularism is considered to be prevalent within organisations, it is often deemed to be acceptable or legitimate by employees (Hudson et al., 2017, p. 12). Within the fields of research, policy and regulation, any anti-corruption response needs to be cognisant of the degree of corruption risk: its potential consequences/implications and the level of incidence/likelihood. Across the Asia Pacific region, 4 percent of people surveyed in Australia reported paying a bribe for a public service, whereas in India, this figure is as high as 69 percent (Transparency International, 2017, pp. 16–17). Hence, the likelihood of bribery in Australia is low. In a study conducted in the Australian state of Victoria, only 4 percent of respondents suspected it to be taking place and less than 1 percent have personally observed it (Graycar, 2013, p. 2). In contrast to the considered harms of particularism, half of all respondents (54%) within the Victorian study considered that bribery was the corrupt act that had the most damaging effects (Graycar, 2013, p. 15); hence, its perceived harms and implications are high. While it was infrequently suspected or personally observed, the same study noted that hiring friends of family for public-sector jobs (particularism) was commonplace (Graycar, 2013, p. 2); hence, its likelihood is high, albeit the latent harms or implications seem to be dismissed or considered low. If anti-corruption efforts focus on ‘tangible’ forms of corruption, such as bribery, this keeps the attention on easily designated practices, and off the more complex forms of corruption by employees who have a higher status or more influence (Kurczewski, 2004, p. 163). The understanding of corruption therefore becomes reductionist, with anti-corruption efforts

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Corruption and administration in local government  141 only focusing on one aspect of a far greater phenomenon. They attend to forms of corruption that might not be as commonplace, such as bribery, yet omit a focus on corrupt tendencies that are more prevalent, but potentially more difficult to discern and then prosecute, such as particularism. In other words, they may hit the broader target, but fall short of the mark. As particularism is not well cogitated, it potentially becomes subsumed within the organisation’s culture and practice, and may prevail regardless of formal rules, governance or anti-corruption initiatives (Mishra, 2006, p. 341). For the local government sector, this has implications in terms of maintaining public trust and delivering on the community’s expectations in a fair and objective way.

LOCAL GOVERNMENT IN NEW SOUTH WALES, AUSTRALIA New South Wales is Australia’s most populous state, and is home to nearly a third of the nation’s population (Australian Bureau of Statistics, 2018). Within Australia, there are three tiers of government: federal government, state or territory government and local government. State or territory governments define the powers of local government – or local councils as they may also be referred – and their geographical boundaries (Australian Government, 2020). Australia has six states and two mainland territories. Within New South Wales, each council’s physical size and population density varies extensively. The largest council area is Central Darling which covers 53,534 square kilometres, and the smallest council area is Hunters Hill at 5.7 square kilometres (DLG NSW, 2013, p. 10). Regional areas typically have a much smaller population than the densely populated metropolitan areas, with Urana Shire Council having just over 1,000 residents and Blacktown City Council having more than 312,000 residents, nearly 265 times as many (DLG NSW, 2013, p. 10). The most densely populated local government areas are in and around Greater Sydney. They account for just under two thirds of the state’s population and 78 percent of the state’s total population growth (Australian Bureau of Statistics, 2013). The majority of councils are in and around the densely populated metropolis of Sydney. In May 2016, the number of councils within New South Wales was reduced following a process of reform. Many councils amalgamated which reduced the number of council entities from 152 to 128 (NSW Government, 2017). While a novel development in the state of New South Wales, the Australian states of Victoria, South Australia and Tasmania have previously experienced similar modalities of local government reform, with the main rationale being economies of scale (Baker, 2003, pp. 119–20; May, 2003, pp. 89–96). Key to these changes was the erasure of boundaries between former local government areas, which are defined by the New South Wales state government (Australian Government, 2020), but also the merging of staff and cultural/occupational models of practice. This is relevant to the study of corruption in the administration of local government, as during any period of organisational change or restructuring there is administrative disruption. The risk of corruption has the potential to metastasise, creating weaknesses in the existing governance of controls which might have previously limited or governed opportunities for corruption (ICAC NSW, 2017b, pp. 7–8). In addition to the local government sector’s fragmented, heterogeneous composition, councils are quite unique in the way they operate when compared to other public-sector organisations (Dollery et al., 2003, pp. 3–4). Each council comprises of a pool of democratically elected members, but the day-to-day operations and administrative functions fall to

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142  Handbook on corruption, ethics and integrity in public administration each council’s general manager or chief executive officer to perform. It is within this realm of administration that particularism is most prone, as the appointment and recruitment of personnel can be easily legitimised by key influencers and decision makers. It can become entwined within administrative practices, and hidden behind the respected veneer of the democratically elected council. At the elected level of local government, the democratic election process provides opposition leaders with the opportunity to expose corrupt incumbents (Rose-Ackerman, 1999, p. 142). Many well-regarded countries today have been the focus of political corruption at one stage or another (Johnston, 2012, pp. 60–1), and the Australian context is no different. However, when corruption is pursued against political elites, this becomes newsworthy, as the ideology of ‘altruistic democracy’ is compromised (Shoemaker & Vos, 2009, p. 44). Consequently, public ‘visibility’ of corruption in Australian local government is centred on the elected officials, rendering public opinion with a perception that local government is a ‘hotbed of corruption’ (Solomons, 2018). However, a celebrification of political or high-profile figureheads is not representative of public officials’ experiences with corruption. It is not indicative of corruption within the local government sector, and the variety of ways in which it might manifest. It potentially disregards the broader implications of pluralistic practices of corruption, and their interrelationships in various situations and structures (Clammer, 2012, p. 117). Hitherto, corruption can, and does, materialise in different forms, yet the 8 million residents of New South Wales are informed primarily about the handful of sensationalistic examples that attain newsworthy status. The sector is considered to be susceptible to corruption (Anechiarico, 2009, p. 80; Klitgaard, 2000, p. 5), but much of what transpires is unknown, as corruption is, by virtue of its very nature, a clandestine activity. More than 54,000 employees work within the administrative realm of local government in New South Wales (Australian Bureau of Statistics, 2017). They may, and do, experience different practices of corruption in different ways (Yates & Graycar, 2020).

THE CASE FOR AUSTRALIA Australia has an anti-corruption commission (ACA) within each of its six states. New South Wales was the first Australian state to establish an ACA, in the form of the Independent Commission Against Corruption (ICAC), created in 1989. The latest ACA to be established is within the Northern Territory (Northern Territory Government, 2018) and the case in Australia is currently being made for a Commonwealth Integrity Commission (Attorney General’s Office, 2018). The existence of particularism is slowly coming to the fore in the public sector of Australia. In very recent years, surveys conducted by two of Australia’s ACAs have highlighted how practices of corruption have been suspected and/or observed within both state and local government (IBAC VIC, 2017a, 2017b; ICAC SA, 2018). Within New South Wales, ‘partiality and personal interest’ feature within the majority of complaints made about public-sector agencies (ICAC NSW, 2018b, pp. 32–3). Noting that local government is the sector most complained about to the ICAC, these observations demonstrate that particularism is palpable, and a cause for concern by those who report their observations to the ICAC (ICAC NSW, 2018a, p. 19).

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Corruption and administration in local government  143 If investigative reports are referred to as a means of examining how particularistic behaviours might take place, one recent example is featured within the ICAC’s report into fraudulent practices at Botany Bay Council which amounted to more than $6 million (ICAC NSW, 2017a). The former Botany Bay Council was situated within the south-eastern suburbs of Sydney and accommodated a population of nearly 42,000 residents (DLG NSW, 2013, p. 64). The fraudulent practices investigated by the ICAC were perpetrated by the chief financial officer and others, and had taken place over a period of nearly two decades. In their final report, the ICAC highlighted how ‘under-skilled staff were able to obtain their positions at the Council because recruitment processes were informal and often subject to influence by senior Council staff’ (ICAC NSW, 2017a, p. 75). Several staff, including the main protagonist, were ‘engaged without a genuine competitive, merit-based selection process’ with one employee quoted as saying that ‘staff just bring their mates to work’ (ICAC NSW, 2017a, p. 75). However, while the ICAC report noted that ‘staff lacked the requisite skills and experience to perform their roles effectively’ (ICAC NSW, 2017a, p. 74), the focus of recommendations was on governance and audit failures, with just one of nine recommendations touching upon the particularism that was evident at Botany Bay Council. Consequently, even when this practice is identified and categorised within the broader investigative efforts of an ACA such as the ICAC, as a regulator of local government corruption in New South Wales, it is not widely accentuated in terms of its significance or as a potential enabler of other corrupt tendencies. More broadly within the local government sector of New South Wales, a study conducted across ten councils identified that preference to hiring family or friends was witnessed by nearly a third of respondents (Yates & Graycar, 2020, p. 92). This paper drew on research conducted by the author of this chapter, and commenced with an excerpt from one of the respondents to the study, who commented: The media and regulators seem to focus exclusively on the big-ticket items e.g. bribes or salacious activity… What is ignored in the corruption focus is the ‘death by a thousand paper cuts’ stuff – the nepotism that may result in an informal network of people who subtly control the place, the leadership culture that may subtly punish compliance with norms/power, lack of systems or skills resulting in lots of small financial losses etc. (Yates & Graycar, 2020, p. 85)

The introductory part of the comment builds on the aforementioned reference to the public reporting of local government corruption, contending that ‘the media and regulators seem to focus exclusively on the big-ticket items’. Noting that the ICAC’s remit is to investigate and make public ‘serious and systemic corruption’ (ICAC NSW, 2016, p. 20), this assumes that the type of matters predominately brought to the attention of the public are the ones that have reached a level of unacceptable pervasiveness and/or seriousness. Given this limited mandate, and the ICAC’s finite resources, it is somewhat understandable that the ICAC remains less attentive to corruption that falls short of this threshold. However, lower-threshold corruption invariably graduates to serious and/or systemic corruption if it is unattended to. By then, corruption has become intertwined within the very fabric of the organisational architecture; this does not happen overnight, but over time. The aforementioned respondent’s contention that this focus ignores the ‘nepotism’ that exists, suggests a cultural norm of corruption that is largely ignored, and supports observations by Mungiu-Pippidi (2017, p. 8), that ‘institutionalised corruption is based on informal particularism’. That is to say, the existence and acceptance of informal particularism paves the way for more corruption. As indicated by several phrases within the aforementioned excerpt,

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144  Handbook on corruption, ethics and integrity in public administration degrees of furtiveness illustrate how corrupt practices can become enmeshed within the daily working life of local government. These have been fostered through a culture of personal interest and partiality: ‘the nepotism that may result in an informal network of people who subtly control the place’, with the extent and normality of such practices exemplified by, ‘the leadership culture that may subtly punish compliance with norms/power’ (emphases added). To add a richer dimension to the excerpt referred to above, a supplementary stage of qualitative research was conducted by the author of this chapter with a purposeful sample of individuals who have experience and expertise in governing, investigating or regulating corruption within local government. Some of these are paraphrased below as a means of highlighting how and why particularism manifests within councils. One interviewee stated: ‘I've seen in plenty of organisations, local government in particular, and probably local government worse than anywhere else in the government sector… this nepotism and… promoting those who you want, because they’re going to be yes people, they’re going to give you what you want, and circumventing processes around that. That is corruption.’ The impetus behind this practice in councils is, as alluded to by the above interviewee, to ensure that ‘yes people’ are favoured in the promotion process; that is, favouritism is shown to employees who acquiesce and conform instead of challenging the status quo. Granovetter (2004, p. 11) contends that any corruption entrepreneur is well placed to ‘choose strategic targets who are centrally located in networks that… best serve his [her] goals… [and] will most likely leverage his [her] efforts’. As they advance within the organisational hierarchy, they are more prone to a ‘higher immorality’, as a consequence of their biographies, but also because they have less conscience about their decision-making practices, argues Mills (2000 [1956], p. 343). This informal practice of social exchange incorporates often intangible, yet well-established, degrees of trust (Popczyk, 2017, p. 50). As one person’s position or influence benefits another, an obligation to reciprocate is inherently created, impacting upon the ongoing and pervasive nature of corruption with agents appointed and promoted to protect each other (Andvig et al., 2000, p. 132). Hence, corruption breeds more corruption (Rose-Ackerman, 1999, p. 3), but reciprocity is elusive and immaterial. Indirect and intangible forms of reciprocity, such as complicity in decision making, enhance the social norm of particularism (Jones, 2016, p. 10). Such forms of complicity mean that different agendas and thinking remain unchallenged, which then further facilitate or enable other unsavoury behaviours: ‘Managers at my Council reward favourite, yet incompetent, staff with promotions, upgrade to higher duties and salaries. My council has a culture of bullying, harassment and intimidation by certain managers (who are then protected by HR).’ This interviewee identifies with a council culture that is based on particularism, where advancement, extra remuneration or other appointment-based perks are afforded to employees who are favoured by management. Such perks or career advancements are funded by the council, which is funded by the rate payer. These subtle, yet potent practices and realities, rarely feature on popular media outlets, even if they are identified during the course of any investigation. As an example, even though the ICAC referred to particularistic practices within their investigation report into Botany Bay Council in 2017, scant attention was given to its prevalence as a key structural and cultural contributor to the corrupt practices which continued for nearly two decades (ICAC NSW, 2017a). The following interviewee’s quote identifies with such structural and cultural factors: It comes down to… having open recruitment processes and encouraging new blood to come into an organisation, rather than this internal nepotism that goes on… If you have a closed recruitment

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Corruption and administration in local government  145 system, as I saw at [name of Council redacted], where your senior managers are all being promoted from underneath within the organisation… you don’t get a fresh wash-in of water into the culture and therefore any bad cultural aspects you have are emboldened and further embedded into the organisation, and at a more senior level… The closed shop organisational approach is a big factor for corruption risk… a culture, which is ethical by definition, will never be a closed culture. A culture, which is corrupt by definition, will usually be a closed culture.

The symbolic existence of a ‘closed recruitment system’ or ‘closed shop organisational approach’ within local government highlights how potentially embedded particularism is, and that as a result, ‘any bad cultural aspects you have are emboldened and further embedded into the organisation, and at a more senior level’. As contended by Ashforth et al. (2008, p. 675), ‘even if the causes of corruption are not entirely systemic, the consequences are’: as employees advance within the council, the more autonomy and influence they have, with social networks further established and embedded through diverse power relations. In this regard, the informality and acceptance of particularism becomes part of the structural and cultural composition of the council. The evolution of particularism, as a form of favouritism in the appointment or recruitment of personnel, is akin to a concept alluded to by Bellow (2003, p. 19), who considers that ‘new nepotism [is] not the return of something tribal and archaic but the transformation of an ancient practice into a new and more acceptable form’. The strength of relationships plays a fundamental role within the formal structure of any organisation (Walton, 2005, pp. 569–70), albeit they are often intangible and unsolidified. Human bonds, self-interests, loyalties and inherent prejudices are examples of factors that may impact upon the dispassionate, objective or merit-based decisions that public servants are expected to demonstrate. Employees in advantaged positions are more likely to advance than those who do not have such social capital or networks, attributed to factors such as status, gender and socioeconomic origin (McNamee & Miller, 2014, p. 83). This is potentially to the detriment of more meritorious candidates who have qualified biographies and credentials.

THE ACCEPTABILITY OF PARTICULARISM Heidenheimer (2009, pp. 152–4) refers to the interpretation of activity that everyday citizens consider corrupt, and how this then affects their evaluation and tolerance of it. A colour-coded classification of black, grey or white corruption is based on the opinion of the majority, and is defined below. Black corruption indicates that in that setting that particular action is one which a majority consensus of both elite and mass opinion would condemn and would like to see punished on grounds of principle. Grey corruption indicates that some elements, usually elites, may want to see the action punished, others not, and the majority would be ambiguous. White corruption signifies that the majority of both elite and mass opinion probably would not vigorously support an attempt to punish a form of corruption that they regard as tolerable. (Heidenheimer, 2009, p. 152)

Heidenheimer postulates that ‘behaviour can surreptitiously cross the indistinct line differentiating grey from black behaviour’, and that some forms of corruption regarded as grey in one setting may be viewed as white, ‘or quite acceptable’, in another setting (Heidenheimer, 2009, p. 153). In this regard, it is worth examining Heidenheimer’s reference to the opinion of the majority. If public perception is informed predominantly by the media and/or the ICAC in

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146  Handbook on corruption, ethics and integrity in public administration relation to certain categories or forms of corruption (Masters & Graycar, 2015, p. 171), then the majority are informed accordingly by this means, with different agendas and interpretations shaping their impressions (Dormaels, 2015, p. 596; Osrecki, 2015, p. 348). Citizens’ knowledge on corruption is thus aligned to newsworthy corruption, such that it may seem exceptional or sensationalistic in nature, and not the mundane or unexceptional practices that have been suspected and/or witnessed routinely. When considering how different practices of corruption may be categorised within a colour-coded classification such as the one described above, one perspective might be that citizens’ views are influenced by the perceived harm, or lack thereof, of the offending act (Becker, 2003, p. 70). This, in turn, affects their tolerance of it and consequently its pervasiveness. To extend the research base referred to by Yates and Graycar (2020), particularism (preference given to hiring friends or family for council jobs) was not only one of the most witnessed practices, but was perceived as the least damaging act for local government officials to perform. This is illustrated in Figure 11.1.

Figure 11.1

Respondents' views on the most damaging acts(s) of corruption that their council could harbour (n = 200)

Noting that bribery was considered by twice as many respondents to be more damaging, this highlights how particularism is not seen as harmful, despite being witnessed by nearly a third of the council officials in the same respondent base (Yates & Graycar, 2020, p. 92). Drawing on Denial Theory (Cohen, 2001, pp. 58–9) and the associated Techniques of Neutralisation,

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Corruption and administration in local government  147 there is a general denial of injury (Sykes & Matza, 1957, pp. 667–8). Those engaging in or benefiting from particularism, or those who observe its incidence, neutralise its wrongfulness because there is little or no perceived harm (Cohen, 2001, p. 60). Its situatedness, therefore, becomes more resistant to the label of corruption, unlike other more well-known practices, such as bribery. One interviewee stated: ‘I think historically there’s been a lot of nepotism, which doesn’t get talked about a lot as corruption but ultimately is, and I’ve seen that all the way through my local government career’. Heidenheimer (2009, p. 142) states that ‘the more complex the network of social interaction and the more complicated and diverse the ways that tangible benefits can be exchanged, the less likely it is that particular actions can clearly be labelled corrupt’. To elaborate on this, unlike bribery, being a well-known category of corruption, particularism is based on different degrees of social interaction and these may be facilitated by various power differentials. The benefits of particularism are not necessarily tangible and can be exceptionally diverse (Masters & Graycar, 2015, p. 153). With further reference to Heidenheimer’s (2009, p. 153) colour-coded classification, he relates grand corruption with a form of condemnation, noting that the majority would expect to see punitive action taken. Kurer (2015, p. 36) offers a similar view, contending that perceptions of corruption are often linked with ‘punishment, not whether the act is corrupt or not’. Accordingly, practices of corruption which are seen as white, or towards the lighter shade of grey within this colour-coded spectrum, would not warrant any form of punishment by those who might observe it. These practices then become tolerated, and by default, seemingly normal within the administration of local government.

THE PROBLEM WITH PARTICULARISM: SEEN, BUT NOT VISIBLE Rotondi and Stanca (2015, p. 231) note: ‘The intrinsic psychological need for a positive self-image drives individuals to compare their own group with other groups to which they do not belong, giving preferential treatment to members relative to non-members. In this perspective, humans are naturally sectarian and particularism is a feature of human nature that may not be easily changed.’

Such is the nature of particularism, that not only is it difficult to determine, but it is inherently very resistant to change. Nepotism and cronyism – practices of corruption which might be categorised as ‘particularism’ – are considered to be quite ‘an ongoing societal issue of great concern to the public’ (Hudson et al., 2017, p. 1). If the community set the bar for what establishes a ‘wrongful exercise of public duty’, and any degree of tolerance with practices of corruption (Johnson & Sharma, 2004, p. 2; Philp, 2009, p. 47), then it seems that this may be the catalyst for intervention. However, the nature of particularism is such that it often does not reach the attention of the community through popular media channels, and therefore, its pervasiveness is not highlighted. Various studies in Australia are beginning to show how potentially rife particularism is; not just within the local government sector of New South Wales (Yates & Graycar, 2020), but interstate, and within and across other public-sector agencies (IBAC VIC, 2017a, p. 8; ICAC SA, 2018, p. 6). If particular acts of corruption, such as particularism, are not considered to be damaging or harmful, then the prospect of them coming to light would be less than other corrupt acts that might be considered more severe. This serves to undermine any attempt to

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148  Handbook on corruption, ethics and integrity in public administration expose the less tangible forms of corruption that may be committed by the elite (Kurczewski, 2004, p. 163), and keeps the current anti-corruption focus on the forms of corruption that are easy to designate, govern and prosecute. With particularism, any degree of mutual assistance or protection is more established the longer that personnel work together (Bauman, 1990, p. 85). From there, a council’s operational and strategic decisions are made by long-standing employees who are socially and psychologically similar, with an interchange based on a convergence of interests (Mills, 2000 [1956], pp. 287–8). Accordingly, a council’s bureaucratic arrangement forms a ‘collective conscience or organisational mind’ (Punch, 1996, pp. 242–3): a situational morality within the collective mindset that is shaped and framed by those who see, do not see or choose not to see issues in what they do and what the others around them do. The local government workforce is ageing and older in comparison to other government and industry sectors (Hastings et al., 2015, p. v). Within the organisational hierarchy of each council in New South Wales, managers and supervisors play a key role in the development of integrity frameworks and practices within local government (Hoekstra & Kaptein, 2013, p. 20). They can facilitate the institutionalisation of corruption by ‘rewarding, condoning, ignoring or otherwise facilitating corruption’ (Ashforth & Anand, 2003, pp. 6–7), but more so in a council in which the culture is based on informal particularism. When respondents’ views about the tolerance of particularism was cross-tabulated with demographic data, more than two thirds of respondents who claim to have directly witnessed particularism have managerial or supervisory responsibilities some or all of the time (Figure 11.2).

Figure 11.2

Cross-tabulation between direct witnessing of particularism and whether employees have managerial or supervisory responsibilities (n = 36)

Through socialisation (Ashforth & Anand, 2003, p. 3), ‘newcomers are taught to perform and accept the corrupt practices’, especially if the managers and supervisors doing the recruiting have benefited by obtaining their appointment or promotion through preference or favouritism rather than merit. The purported lack of concern regarding the impacts of particularism,

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Corruption and administration in local government  149 together with its societal acceptability and tolerance, thus compounds its absence of visibility and renders it seemingly normal within the bureaucracy of administration. It is potentially embedded within the structure and culture of local government and may endure in perpetuity if allowed to. Arguably, while those who may have benefited from particularism might be more inclined to then continue to follow the same particularistic style in their own recruitment and appointment of personnel, clearly there are a number of observers who feel very strongly about the unfairness of particularistic behaviours, as demonstrated by the vast number of complaints made to the ICAC that relate to partiality and personal interests (ICAC NSW, 2018b, p. 32). The implications of particularism are relatively underconsidered or researched. Feasibly, councils’ strategic direction and operational decision-making processes are shaped by collective mindsets, at the expense of intellectually challenging ideas and innovation. Individuals who have advanced based on their connections, rather than their credentials, may not have the requisite skill sets, but are remunerated and then advance in a similar manner; potential appointees, who have studied, trained and earned their credentials are unsuccessful in spite of their endeavours. Whether such actions then translate into unfavourable outcomes for those within the community that are affected by the decisions of their council is difficult to say, and certainly not possible to generalise. Perhaps one of the key implications that should be considered is how the existence and acceptance of particularism establishes the foundation for further corrupt tendencies. If ‘institutionalised corruption is based on informal particularism’ (Mungiu-Pippidi, 2017, p. 8), this seemingly features as a causality behind the resultant aggregation of less significant forms of corruption that then build up to be more serious or systemic, as was evident at Botany Bay Council.

CONCLUSION Conducting ethnographic research on corruption is difficult, as the topic is highly sensitive, and potentially contentious if conducted within the organisational environment itself (Rothstein & Torsello, 2014, p. 264). There is not a great deal of research examining employees’ perceptions of particularism (Hudson et al., 2017, p. 1). This chapter highlights that giving preference to hiring family or friends for council roles might be commonplace within the local government sector. As it is not seen as harmful, it potentially continues unconsciously and automatically without any comprehension that anything is wrong by those that advance as a result. Hence, particularism could be one of the most insidious forms of subterfuge. Once it is practised, and then further established through cultural acceptance and tolerance, it becomes reinforced and routinised through the same cliques that have previously benefited. The ensuing strategic direction of a council is then determined accordingly by personnel who have not obtained their positions through merit, but through the favouritism and preference of influential bureaucrats. Particularism is one aspect of the corruption puzzle that needs to explored and unpacked further, not just in terms of its potential existence and different manifestations, but the structural and cultural conditions that contribute to its ingrained presence. Citizens’ ongoing referrals to the ICAC about partiality and preference in the appointment and recruitment of council employees indicates that more needs to be done to unravel and manage this complex phenomenon within the local government sector of New South Wales.

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REFERENCES Andvig, J. C., Fjeldstad, O.-H., Amundsen, I., Sissener, T., & Søreide, T. (2000). Research on Corruption: A policy orientated survey. Oslo. Retrieved from www​.icgg​.org/​downloads/​contribution07​_andvig​ .pdf on 2 April 2020. Anechiarico, F. (2009). Protecting Integrity at the Local Level: The role of anticorruption and public management networks. Crime Law and Social Change, 53, 79–95. Ashforth, B. E., & Anand, V. (2003). The Normalization of Corruption in Organizations. Research in Organizational Behavior, 25, 1-52. Ashforth, B. E., Gioia, D. A., Robinson, S. L., & Treviño, L. K. (2008). Re-viewing Organizational Corruption. Academy of Management Review, 33(3), 670–84. Attorney General’s Office. (2018). A Commonwealth Integrity Commission: Proposed reforms. Canberra: Australian Government. Retrieved from www​.ag​.gov​.au/​Consultations/​Documents/​commonwealth​ -integrity​-commission/​cic​-consultation​-paper​.pdf on 2 April 2020. Australian Bureau of Statistics. (2013). Regional Population Growth, Australia, 2011–12: New South Wales. Australian Bureau of Statistics. Retrieved from www​.abs​.gov​.au/​ausstats/​abs@​.nsf/​ Previousproducts/​3218​.0Main​%20Features42011​-12​?opendocument​&​tabname​=​Summary​&​prodno​=​ 3218​.0​&​issue​=​2011​-12​&​num​=​&​view​=​#PARALINK3 on 2 April 2020. Australian Bureau of Statistics. (2017). Employment and Earnings, Public Sector, Australia, 2016–17, 9 November. Retrieved from www​.abs​.gov​.au/​AUSSTATS/​abs@​.nsf/​DetailsPage/​6248​.0​.55​.0022016​ -17​?OpenDocument on 7 April 2020. Australian Bureau of Statistics. (2018). Australian Demographic Statistics, Mar 2018. Retrieved from www​.abs​.gov​.au/​ausstats/​abs@​.nsf/​mf/​3101​.0 on 2 April 2020. Australian Government. (2020). Local Government (Councils). Retrieved from www​.australia​.gov​.au/​ about​-government/​how​-government​-works/​local​-government on 7 April 2020. Baker, G. (2003). Management Reform in Local Government. In B. Dollery, N. Marshall & A. Worthington (Eds), Reshaping Australian Local Government (pp. 117–38). Sydney: UNSW Press. Bauman, Z. (1990). Thinking Sociologically. Oxford: Blackwell. Becker, H. S. (2003). Labeling Theory. In P. A. Adler & P. Adler (Eds), Constructions of Deviance: Social power, context and interaction (pp. 71–4). Belmont, CA: Wadsworth/Thomson Learning. Bellow, A. (2003). In Praise of Nepotism: A natural history, 1st ed. New York: First Anchor Books. Clammer, J. (2012). Corruption, Development, Chaos and Social Disorganisation: Sociological reflections on corruption and its social basis. In M. Barcham, B. Hindess & P. Larmour (Eds), Corruption: Expanding the focus (pp. 113–32). Canberra: ANU E-press. Cohen, S. (2001). States of Denial. Cambridge: Polity Press. DLG NSW. (2013). Comparative Information on NSW Local Government: Measuring local government performance 2011/12. Nowra: Division of Local Government. Retrieved from www​.olg​.nsw​.gov​.au/​ wp​-content/​uploads/​NSW​-Local​-Government​-Councils​-Comparative​-Information​-2011​-2012​.pdf on 7 April 2020. Dollery, B., Marshall, N., & Worthington, A. (Eds) (2003). Reshaping Australian Local Government. Sydney: University of New South Wales Press. Dormaels, A. (2015). Perceptions of Corruption in Flanders: Surveying citizens and police. A study on the influence of occupational differential association on perceptions of corruption. Policing and Society, 25(6), 596–621. Granovetter, M. (2004). The Social Construction of Corruption. Paper presented at The Norms, Beliefs and Institutions of 21st Century Capitalism: Celebrating the 100th Anniversary of Max Weber’s The Protestant Ethic and the Spirit of Capitalism, Cornell University, Ithaca, NY. Graycar, A. (2013). Research Paper: Perceptions of corruption in Victoria. Melbourne. Graycar, A., & Villa, D. (2011). The Loss of Governance Capacity through Corruption. An International Journal of Policy, Administration, and Institutions, 24(3), 419–38. Hastings, C., Ryan, R., Gibbs, M., & Lawrie, A. (2015). Profile of the Australian Local Government Workforce 2015. Sydney. Retrieved from www​.uts​.edu​.au/​sites/​default/​files/​Profile​-of​-the​-Local​ -Government​-Workforce​.pdf on 2 April 2020.

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Corruption and administration in local government  151 Heidenheimer, A. J. (2009). Perspectives on the Perceptions of Corruption. In A. J. Heidenheimer & M. Johnston (Eds), Political Corruption: Concepts and contexts, 3rd ed. (pp. 141–54). New Brunswick, NJ: Transaction. Heywood, P. M. (2017). Rethinking Corruption: Hocus-pocus, locus and focus. Slavonic and East European Review, 95(1), 21–48. Hoekstra, A., & Kaptein, M. (2013). The Institutionalization of Integrity in Local Government. Public Integrity, 15(1), 5–27. Hudson, S., González-Gómez, H. V., & Claasen, C. (2017). Legitimacy, Particularism and Employee Commitment and Justice. Journal of Business Ethics, 1–15. IBAC VIC. (2017a). Perceptions of Corruption: Survey of Victorian local government employees. Melbourne: Independent Broad-based Anti-corruption Commission. Retrieved from www​.ibac​.vic​ .gov​.au/​docs/​default​-source/​research​-documents/​perceptions​-of​-corruption​-survey​-of​-victorian​-local​ -government​-employees​.pdf​?sfvrsn​=​4 on 2 April 2020. IBAC VIC. (2017b). Perceptions of Corruption: Survey of Victorian state government employees. Melbourne: Independent Broad-based Anti-corruption Commission. Retrieved from www​.ibac​.vic​ .gov​.au/​docs/​default​-source/​research​-documents/​perceptions​-of​-corruption​-survey​-of​-victorian​-state​ -government​-employees​.pdf​?sfvrsn​=​4 on 2 April 2020. ICAC NSW. (2016). Annual Report 2015–16. Sydney: Independent Commission Against Corruption. Retrieved from www​.icac​.nsw​.gov​.au/​docman/​about​-the​-icac/​corporate​-reporting/​4901​-annual​ -report​-2015​-16​-final/​file on 2 April 2020. ICAC NSW. (2017a). Investigation into the Conduct of theFormer City of Botany Bay Council Chief Financial Officer and Others (Operation Ricco). Sydney: Independent Commission Against Corruption. Retrieved from www​.icac​.nsw​.gov​.au/​images/​Investigation​-into​-the​-conduct​-of​-the​ -former​-city​-of​-botany​-bay​-council​-chief​-financial​-officer​-and​-others​_Operation​-Ricco​_26July2017​ .pdf on 2 April 2020. ICAC NSW. (2017b). Keeping It Together: Systems and structures in organisational change. Sydney: Independent Commission Against Corruption. Retrieved from www​ .icac​ .nsw​ .gov​ .au/​ docman/​ preventing​-corruption/​cp​-publications​-guidelines/​4965​-keeping​-it​-together​-systems​-and​-structures​ -in​-organisational​-change​-14march17/​file on 2 April 2020. ICAC NSW. (2018a). Annual Report 2017–18. Sydney: Independent Commission Against Corruption. Retrieved from www​.icac​.nsw​.gov​.au/​ArticleDocuments/​617/​ICAC​%20Annual​%20Report​%202017​ -18​%20​.pdf​.aspx on 2 April 2020. ICAC NSW. (2018b). Corruption and Integrity in the NSW Public Sector: An assessment of current trends and events. Sydney: Independent Commission Against Corruption. Retrieved from www​ .icac​.nsw​.gov​.au/​ArticleDocuments/​232/​Corruption​-and​-integrity​-in​-the​-nsw​-public​-sector​-an​ -assessment​-of​-current​-trends​-and​-events​_7Dec18​.pdf​.aspx on 2 April 2020. ICAC SA. (2018). Public Integrity Survey 2018. Adelaide: Independent Commissioner Against Corruption South Australia. Retrieved from https://​icac​.sa​.gov​.au/​system/​files/​ICAC​_Public​_Integrity​ _Survey​_2018​.pdf on 2 April 2020. Johnson, R. A., & Sharma, S. (2004). About Corruption. In R. A. Johnson (Ed.), The Struggle Against Corruption: A comparative study (pp. 1–20). New York: Palgrave Macmillan. Johnston, M. (2005). Syndromes of Corruption: Wealth, power, and democracy. Cambridge: Cambridge University Press. Johnston, M. (2012). Building a Social Movement against Corruption. Brown Journal of World Affairs, 18(2), 57–74. Jones, D. (2016). Socially Enforced Nepotism: How norms and reputation can amplify kin altruism. PLoS ONE, 11(6), 1–13. Klitgaard, R. (2000). Subverting Corruption. Finance and Development, 37(2), 1–5. Kurczewski, J. (2004). Is a Sociology of Corruption Possible? Polish Sociological Review, 2(146), 161–81. Kurer, O. (2015). Definitions of Corruption. In P. Heywood (Ed.), Routledge Handbook of Political Corruption (pp. 30–41). Abington: Routledge. Masters, A., & Graycar, A. (2015). Media Reporting of Corruption: Policy implications. Crime Law and Social Change, 64, 153–75.

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152  Handbook on corruption, ethics and integrity in public administration May, P. (2003). Amalgamation and Virtual Local Government. In B. Dollery, N. Marshall & A. Worthington (Eds), Reshaping Australian Local Government (pp. 79–97). Sydney: University of New South Wales Press. McNamee, S. J., & Miller, R. K. J. (2014). The Meritocracy Myth, 3rd ed. Lanham, MD: Rowman and Littlefield. Mills, C. W. (2000 [1956]). The Power Elite. New York: Oxford University Press. Mishra, A. (2006). Persistence of Corruption: Some theoretical perspectives. World Development, 34(2), 349–58. Mulgan, R. (2012). Aristotle on Legality and Corruption. In M. Barcham, B. Hindess & P. Larmour (Eds), Corruption: Expanding the focus (pp. 25–36). Canberra: ANU E-press. Mungiu-Pippidi, A. (2017). Seven Steps to Evidence-Based Anti-Corruption: A roadmap. Stockholm: Elanders Sverige AB. Retrieved from https://​eba​.se/​wp​-content/​uploads/​2017/​11/​2017​_10​_final​ -webb​.pdf on 7 April 2020. Northern Territory Government. (2018). Independent Commission Against Corruption – Draft Legislation. Department of the Attorney-General and Justice. Retrieved from https://​justice​.nt​.gov​.au/​ attorney​-general​-and​-justice/​law/​icac​-bill on 2 April 2020. NSW Government. (2017). Stronger Councils | Stronger Communities. NSW Government. Retrieved from www​.strongercouncils​.nsw​.gov​.au/​ on 2 April 2020. Osrecki, F. (2015). Fighting Corruption with Transparent Organizations: Anti-corruption and functional deviance in organizational behavior. Ephermera: Theory and Politics in Organization, 15(2), 337–64. Philp, M. (2009). Conceptualizing Political Corruption. In A. J. Heidenheimer & M. Johnston (Eds), Political Corruption: Concepts and contexts, 3rd ed. (pp. 41–57). New Brunswick, NJ: Transaction Publishers. Popczyk, W. (2017). Family Social Capital Versus Nepotism in Family Businesses. Paper presented at the 5th RSEP Social Sciences Conference, Barcelona. Retrieved from http://​rsepconferences​.com/​ my​_documents/​my​_files/​5​_WOJCIECH​_POPCZYK​.pdf on 2 April 2020. Pope, J. (2000). Conflict of Interest, Nepotism and Cronyism. In TI Source Book 2000. Confronting Corruption: The elements of a national integrity system (pp. 195–204). Berlin: Transparency International. Punch, M. (1996). Dirty Business: Exploring corporate misconduct. London: SAGE. Rose-Ackerman, S. (1999). Corruption and Government: Causes, consequences, and reform. Cambridge: Cambridge University Press. Rothstein, B., & Torsello, D. (2014). Bribery in Preindustrial Societies: Understanding the universalism– particularism puzzle. Journal of Anthropological Research, 70(2), 263–84. Rotondi, V., & Stanca, L. (2015). The Effect of Particularism on Corruption: Theory and empirical evidence. Journal of Economic Psychology, 51, 219–35. Shoemaker, P. J., & Vos, T. (2009). Gatekeeping Theory. New York: Routledge. Solomons, M. (2018). Something Rotten in the State of Queensland. Brisbane Times, 4 May. Retrieved from www​.brisbanetimes​.com​.au/​politics/​queensland/​something​-rotten​-in​-the​-state​-of​-queensland​ -20180504​-p4zdhx​.html on 2 April 2020. Sykes, G. M., & Matza, D. (1957). Techniques of Neutralization: A theory of delinquency. American Sociological Review, 22(6), 664–70. Transparency International. (2017). Global Corruption Barometer, People and Corruption: Asia Pacific. Berlin: Transparency International. Retrieved from www​ .transparency​ .org/​ whatwedo/​ publication/​ people​_and​_corruption​_asia​_pacific​_global​_corruption​_barometer on 2 April 2020. Transparency International. (2018). How Do You Define Corruption? Berlin: Transparency International. Retrieved from www​.transparency​.org/​whoweare/​organisation/​faqs​_on​_corruption​#defineCorruption on 2 April 2020. Walton, E. J. (2005). The Persistence of Bureaucracy: A meta-analysis of Weber’s model of bureaucratic control. Organization Studies, 26(4), 569–600. Yates, A., & Graycar, A. (2020). Death by a Thousand Cuts: Recognizing, reporting and responding to corruption in local government. Public Integrity, 22(1), 85–103. Zimring, F. E., & Johnson, D. T. (2005). On the Comparative Study of Corruption. British Journal of Criminology, 45, 793–809.

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12. Curbing corruption in tax administration with enhanced risk mapping of business processes Tuan Minh Le and Beytullah Sarican Disclaimer: The authors are, respectively, Lead Economist, and Senior International Tax Consultant at the World Bank. The chapter should be cited with the names of the authors. The findings, interpretations and conclusions expressed in this chapter are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

INTRODUCTION AND ANALYTICAL FRAMEWORK This chapter discusses the causes of corruption in tax administration and provides an analytical framework for designing the appropriate approach to mitigate it through enhancement of functional business processes. In broad terms, corruption is defined as the abuse of entrusted power for private gain.1 In tax administration, the broad definition of corruption can be unbundled into two separate sets of behavior by taxpayers and by tax officials (see, for example, Low, 1995): 1. Tax officials are corrupt when they use conferred monopoly power to extort money from taxpayers, or to collude with taxpayers in defrauding the treasury, or to find some other means of embezzling money from the tax authorities. 2. Taxpayers evade taxes when they intentionally fail to declare taxable economic activity or use false declarations, with or without collusion from tax officials. Corruption erodes trust in government and is detrimental to the quality of public institutions. It therefore impedes the achievement of sustainable development goals. The Transparency International Global Corruption Barometer and surveys in developing and transition countries indicate that revenue administration agencies are typically ranked the most corrupt public institutions (Le, 2007). It is commonly observed that corruption associates with lower revenue collection. The International Monetary Fund (2019) estimates that the least corrupt governments collect 4 percent of gross domestic product (GDP) more in tax revenues than countries with the highest levels of corruption and the annual total cost of bribery is estimated to be $1.5–2 trillion per year, which is roughly 2 percent of global GDP.2 The underpinning factors of such high corruption and low collection embed in the state’s weakened capacity to tax, inherent disincentives for taxpayers to comply with tax laws and the need for the revenue administration officials to collect more for the treasury. Corruption in the revenue systems has varied impacts on ultimate collection across different types of taxes. Tanzi and Davoodi (2000) suggest such negative impacts are more felt in the case of direct taxes versus indirect taxes. Regardless, reducing corruption becomes a priority in tax administration reforms and the advancement of information technology (IT) supports such effort. Technology plays a major role in transforming the ways governments deliver services to and interact with citizens across various sectors and e-governments initiatives. Automating systems help combat corruption by reducing officials’ discretion (Okunogbea & 153 Tuan Minh Le and Beytullah Sarican - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:44PM via The University of British Columbia Library

154  Handbook on corruption, ethics and integrity in public administration Pouliquenb, 2018). However, technology alone does not solve the rooted problems of corruption and inefficiencies in tax administration. To make effective use of advanced IT, revenue administrations need to ensure complementary reforms to reengineer business processes and to develop appropriate legal and human management systems. This chapter focuses on the administrative corruption. It particularly analyzes the factors and their vulnerabilities to corruption risks across all the major business functions in tax administration through detailed discussion of the risk process mapping. We supplement our stylized discussion with documented country experiences. Opportunities for corruption take on different forms and dimensions (Dos Santos, 1995). Within this analytical framework, we acknowledge that the first steps in reengineering business processes is to diagnose existing constraints and then map the key business processes in a coherent set of procedural flows and institutional interlinkage. Such thorough risk mapping would assist the senior management of revenue agencies to determine the core vulnerabilities and the approach to mitigate such risks. The chapter is structured as follows. The first section frames the core causes and consequences of corruption in taxation. In the second section, we attempt to present a coherent approach to map the risks across all the major tax administration functions. The third section highlights some country examples in dealing with corruption.

FRAMING ISSUES OF CORRUPTION IN TAXATION Causes of Corruption in Taxation To develop workable solutions and initiatives, one must first analyze its main causes and motivations in functions under tax administration. As such, operationalizing the definition of corruption in the sector as disaggregated into the underlying motives and opportunities for either taxpayers or tax officials or both becomes critical. The underlying causes that drive the supply of corruption from tax officials are multiple. Tax economists and practitioners offer a list of factors influencing the motives and opportunities for corruption on either side of taxpayers and tax administration officials or both: lack of transparency; complicated and/or discretionary tax systems; poor enforcement; perceptions of unfairness in taxation and services; poor government services; lack of integrity, ethics, formality; and the absence of a functional appeal system (see, for examples, Evans, Krever, & Alm, 2017; Rahman, 2009; and Purohit, 2007). Complexity of tax laws and procedures The structure of tax regimes creates opportunities, which is influenced by the legal, regulatory and policy framework. According to a World Bank study of 104 countries involving different income groups and regions covering the period of 2002–12 (Awasti & Bayraktar, 2014), there is a strong correlation between the various measures of corruption and the indicators of the tax complexity; a less complex tax system is seen to be associated with a less corrupt government. Professional ethics and legislation A lack of professional ethics and deficient laws to regulate, prosecute and sanction corruption as a criminal offense is another important cause for the emergence and spread of corruption.

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Curbing corruption in tax administration  155 A great influence comes also from ineffective sanctioning of corruption, which only increases the possibility of continuing the corruptive actions of those involved, creating at the same time a strong likelihood that others will join in the corruption. Corruption also generates a lack of transparency and control by supervisory institutions. Therefore, where there is insufficient legal basis or political will to enable transparent functioning of both politics and the economy, corruption flourishes. Corruption is also affected by the extensive, non-transparent or incomplete legislation, where laws can be interpreted in different ways (Šumah, 2018). Lack of transparency A lack of transparency creates opportunities for tax officials to abuse their duties for private gain. This closely relates to accountability, and weak accountability mechanisms tend to facilitate corruption. Corruption will flourish where there is a lack of transparency and accountability. Tax transparency, in the broad sense as it is understood here, serves different functions. One has to distinguish between the direct procurement of information and further targets which are pursued by tax transparency, i.e. deterrence on the one hand and accountability and trust in the tax administration on the other hand. Transparency in regard to the information necessary to assess taxes is an inevitable precondition for a fair and equal application of tax laws (Schoueri & Barbosa, 2013). Functional organization and segregation of duties within the department Responsibilities in a process are entrusted to one tax official rather than separated and delegated to several tax officials, without the goal of providing a system of checks and balances to prevent errors or dishonest behavior. Tax officials are generally allotted geographical areas of operations. For a particular taxpayer, the tax officer is the tax department. This monopoly power gives tax officers the opportunity to entice taxpayers into corrupt practices of paying bribes (Purohit, 2007). The fact that liability and taxation transactions are carried out with the same tax officer is an important reason for corruption. A lack of clearly defined roles, functions and duties of public officials creates an environment ripe for corrupt behavior (Pashev, 2005). Internal oversight service The absence of supervision and accountability gives workers an opportunity to refrain from performing public duties. The absence of measures designed to maintain the integrity of staff—such as the promotion and enforcement of ethical standards, merit-based recruitment and promotion procedure, and regular staff rotation schemes to prevent the creation of lucrative networks—increases the likelihood of staff indulging in corrupt practices (Purohit, 2007). Lack of effective communication channels If the communication channels of the tax administration are insufficient, taxpayers may resort to corruption in order to speed up their transactions. The fact that communication channels are open increases the transparency of the tax administration. Openness, timeliness and flexibility are fundamental communication values that should lead the tax administration in fulfilling its mission and vision. Officials’ expectation to find high-salaried job in taxpayers’ businesses Tax collectors can “collect” small bribes from small businesses and can deliberately reduce the tax fines and penalties by keeping their amount sufficiently low. They do so because after

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156  Handbook on corruption, ethics and integrity in public administration working in a high-level public inspection institution for a number of years, they transfer to the “big” businesses with more profitable positions. By keeping their number sufficiently low, they control the supply of their knowledge deliberately and gain a reputation in the sense that they are not corruptible. After changing their position from the public office to private companies, they go with their “insider information” and cause the higher-level tax evasion or lobbying which might increase inefficiencies (Akdede, 2006). Low level of automation Tax administrations with poor automation have a cumbersome structure, which imposes a serious workload on tax officers. Long-term taxation transactions compel both tax officers and taxpayers to find different solutions. Tax administrations, where automation systems are inadequate, keep communication between taxpayers and tax officers at a high level. This makes the transactions suitable for bribery and corruption. Problems with appeals processes Tax cases are often complex and general courts cannot specialize in tax questions, so their decisions have little chance of being technically sound. In addition, lack of knowledge on the part of the judiciary produces results that can be contradictory and unfair: sometimes judges have the attitude of taxpayers confronting the tax administration independent of the merits of the case they are judging and other times they blindly trust the tax administration as they cannot understand about the case. Both types of behavior undermine the foundations of the rule of law and can indirectly lead to corruption (Thuronyi, Counsel & Espejo, 2013). Consequences of Corruption The consequences of corruption in tax administration are multi-faceted and well documented in the literature. Low compliance level A major detrimental impact of corruption is a loss of public trust in the work of the tax administration. Corruption lowers the level of compliance. It leads to the deterioration of and inequity in income distribution, which in turn make taxpayers not trust the government and choose emotional tax non-compliance (Cheng and Zeng, 2017). Normalization of corruption Entrenched corruption normalizes itself through some sort of “herd” behavior. Corrupt colleagues and friends weaken the will of honest officers and reduce the probability of being detected or losing one’s reputation. As the number of corrupt tax collectors increases, the guilt feeling of indulging in wrongdoing decreases. When networks of corruption exist, firing some corrupt officials does not improve the situation, as the fired officials become consultants and add to the network (Fjeldstad, 2005). Corruption breeds further corruption. Collusion between corrupt taxpayers and corrupt tax officials puts honest taxpayers at a disadvantage, encouraging them to evade taxes (Purohit, 2007).

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Curbing corruption in tax administration  157 Reduction of tax revenues Corruption drastically reduces tax revenues, forcing governments to find other avenues for financing government expenditure, including borrowing and inflationary measures. Future fiscal flexibility is reduced, because servicing of debt has to be given priority over other expenditures. This creates a vicious circle endangering fiscal sustainability (Purohit, 2007). Reduction of the modernization of tax administrations Corruption affects the quality of governance. In a corrupt environment, officials make decisions that do not serve the public interest but promote the interests of corrupt individuals. Administrative efficiency is at a low level because patronage and nepotism tend to encourage the recruitment of incompetent people. Public expenditure manipulation Corruption increases the volume of public investments (at the expense of private investments), including unjustified and wasteful investments in tax administration in the name of updating, for example, the IT system whereas other areas of administration remain neglected. There are many options for public expenditure manipulation and these are typically carried out by high-level officials so as to get bribes. This means that more general government expenditures or a large budget offers more opportunity for corruption (Šumah, 2018). Reduction of investments and growth Corruption in tax administration contributes to lower foreign and domestic investments. All things being equal, investors would look for locales in which there is less corruption, fewer red tape, simpler laws and procedures and a transparent regulatory environment. Corruption leads to economic waste and inefficiency, because it adversely affects the potential collection of revenues, optimal allocation of funds, productivity and consumption.

MAPPING RISKS AND OPPORTUNITIES FOR CORRUPTION Worldwide, the organizational structure of tax administration has undergone substantial changes—shifting from archaic tax-type to functional-based, and then to a combination of functional and taxpayer segmentation models. Under the functional model, tax authorities are organized along functional lines, with particular roles assigned to headquarters and regional operational units. International experience indicates that business process reengineering is an integral part of the overall effective approach to preventing corruption in tax administration. This methodology includes reengineering the core business processes and sub-processes of taxpayer functions along with their vulnerabilities to corruption and remedial measures to address the problems. In this regard, this chapter examines the business processes of the five core tax administration functions and their vulnerabilities. Each part of this session focuses on a single core function with a graphical illustration of the business process via a process flowchart and risk analysis. Our analytical methodology follows the international good practices with tested and workable instruments. The five core functions in tax administration under review are: (1) taxpayer registration; (2) the filing of tax declarations and payment processing; (3) tax audit;

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158  Handbook on corruption, ethics and integrity in public administration (4) arrears management; and (5) tax appeals. These functions are operated predominantly at the local and regional office levels. This session explores the usefulness of mapping corruption risks in business process flows as a basis for designing suitable anti-corruption strategies. It begins with the risk mapping in each of the tax administration functions followed by a matrix identifying the key institutional and procedural corruption vulnerabilities and potential risk mitigations measures. Taxpayer Registration Registration procedures play a critical role in discovering taxpayers who have never registered for tax purposes, which underpins return filing, collection and assessment activities. Tax registration is a record compilation function that enables the authorities to identify a person as a “taxpayer”,3 “responsible person”4 or “potential taxpayer”5 based on tax obligations, who is required to inform the authorities about any changes within a certain period of time. The function of registration thus constitutes an important task for tax administration. Tax administrations cannot fulfill its tasks and achieve its desired outcomes and objectives without reliable information, captured in the registration process. It is therefore essential to oblige taxpayers to register and to provide and update their information. Figure 12.1 and Table 12.1 respectively present a flow chart and analysis of the corruption risks in tax registration. Corruption would lead to an incomplete or unreliable taxpayer database and would thus narrow the base and risks rendering the entire tax administration ineffective. Filing of Tax Return and Payment Processing Figure 12.2 and Table 12.2 provide analysis of the corruption risk mapping in tax filing and payment. There are two main fundamental systems used internationally to determine the amount of tax liability through the submission of tax returns: official administrative-assessment system and self-assessment system. 1. Official administrative–assessment system: the tax liability is assessed and calculated by tax administration with notice of assessment upon presentation of taxable information. This method involves multiple visits to the tax authority, rent-seeking behavior and duplication of activities. 2. Self-assessment system: each taxpayer makes its own tax assessment of its business and reports its taxable base for the relevant tax period. Self-assessment is one of the fundamental strategies that enable tax administrations to effectively implement the tax legislation and increase voluntary compliance. For example, the findings of the studies revealed that tax compliance in post-self-assessment full implementation is higher than that of pre-self-assessment full implementation, while tax complexity is lower than that of pre-self-assessment full implementation (Masud & Alkali, 2015). The gold standard for self-assessment is that tax returns should be simple and easily accessible or mailed to taxpayers with basic instructions. If possible, tax returns should be distributed alongside specific information about taxpayers’ economic activities such as taxable amount, which requires the tax administrations to have third-party information channels to generate pre-filled tax returns for taxpayers using third-party information. A pre-filled tax return mech-

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Curbing corruption in tax administration  159

Figure 12.1

The taxpayer registration processing

anism will enable most taxpayers to meet their obligations but if it is to work effectively, the tax administration must have accurate and reliable information about taxpayers’ economic activities (such as their employers, banks or insurance companies).

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160  Handbook on corruption, ethics and integrity in public administration Table 12.1 Ref.

Corruption risks in the taxpayer registration process

Selected key tax

Likely risk Analysis on risk or threat of

administration

level

corruption

Medium

Possible remedial measures

operations 1.1

Accelerate the processing of

The registration process should be fully

registration documents

registration documents in the

automated with minimum human intervention

at the tax office with

system, ignoring any intentional

and the business registration process should

the physical forms.

or unintentional errors. Accept

be integrated and verified with other relevant

unreliable/uncertified documents,

government agencies. The simplification

ignoring the need for detection of

measures should ensure that taxpayers can

Submission of the

possible fraud or falsified supporting follow up the stages of the registration

1.2

documents for tax registration.

process at the centralized government agency

System check with the Medium

Creation of multiple false tax

network—referred to as e-government. As an innovative initiative, the national

previous registration or

identification numbers to facilitate

identification number is corresponded to the

other tax registrations.

tax fraud and establishment of

individual tax identification numbers for

ghost taxpayer with invalid address

citizens.

or same address, which is already registered with another taxpayer (highly risky in the administration of 1.3

The certification/

High

a value-added tax). When the taxpayer is registered with The principle of segregation of duties should

licensing process being

the system, automatically eligible

be properly applied and the entire process

administered manually

to get benefit of some exemption

should be administered online through an

for taxpayers that are

and economic incentives from the

e-government platform. The lack of reliable

looking for fiscal or

government, which is certified by

registration data creates opportunities for

non-fiscal incentives

the tax administration standalone

the officials and taxpayers as well. The

through bribery.

or jointly.

verification program needs to be designed carefully to ensure the capture of all legitimate, potential taxpayers and categorize them

1.4

Identification of

High

accordingly. The tax administration officials can Cross-check with other government agencies.

potential taxpayers

overlook the potential taxpayers

Effective on-site inspection visit program at

and non-registered

who fail to register or falsify their

the taxpayer premises through dedicated unit.

individuals and legal

registration identities/types of

entities.

business.

Tax Arrears Management The collection of tax arrears and tax refund processing are among the critical functions of a tax administration in curbing corruption. Tax arrears are those liabilities that have been legally assessed through a self-assessment, an administrative action and an audit, but not paid by the legal deadline, including (a) outstanding tax liability; (b) penalties; (c) interest accrued; and (d) other legally imposed amounts (Crawford, 2013). Tax authorities are relatively equipped with the legal authority to enforce the collection of tax debts. Tax arrears and refund management are among the highest risky areas if there is an absence of standard, automated operation procedure, which is automated (Figure 12.3 and Table 12.3).

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Curbing corruption in tax administration  161

Figure 12.2

The filing of tax returns and payment processing

Tax Audit Tax audit function along with its selection process is highly susceptible to corruption (Figures 12.4 and 12.5 and Table 12.4). Tax audit is the examination of a taxpayer’s business records and financial affairs to ensure that the amount of tax reported and paid are in accordance with tax laws and regulations. An efficient and effective tax audit division will assist the govern-

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162  Handbook on corruption, ethics and integrity in public administration Table 12.2

Corruption risks in the filing of tax returns and payment processing

Selected key tax Ref.

administration operations

Tax filing in the

2.1

self-assessment system.

Likely risk level

High

Analysis on risk or threat of corruption

Possible remedial measures

The tax administration would fail to

Identify and publish the principles of

fulfill the key conditions and functions

the self-assessment system for both

for a properly functioning self-assessment

internal tax administration staff training/

system: (1) a legal framework—sufficient

guidance and taxpayers service charter in

understanding of tax obligations and

communication with taxpayers.

rights; (2) taxpayer-oriented services; (3) simplified filing and payment procedures; (4) effective non-compliance detection and collection enforcement; (5) a selective risk-based audit program and fairly applied sanctions; and (6) fair and timely dispute resolution (Okello, 2014). In case of in-person submission, tax

As an innovative initiative, the

officials may take advantage of the lack

introduction or improvement of

of knowledge of taxpayers regarding tax

electronic systems for filing and paying

laws. Especially in low-income developing taxes (2.1 (b), flowchart) reduce the frequency of in-person interactions

provides a face-to-face service at the tax

between taxpayers and tax officials and

offices and this creates more opportunity

reduce collusion between the two parties

to tax officials for extortion. They can use

to reduce tax payments.

their power and threat in order to extort

The development of new initiatives

illicit payments from taxpayers, which is

plays a critical role in delivering

referred to as extortion. Tax declarations

a corruption-free service that underpins

also are submitted by the tax intermediaries core functions such as:

Tax payment and

(accountant, CPA or lawyer). Within

– separate, dedicated tax facilitation

tax administrations, tax intermediaries’

centersa

nil-filers and

networks might negatively influence

– a tax legislation portal with

non-payers.

the environment if there is no sufficient

sector-specific secondary regulations

regulation about the responsibility of the

– an effective call center facility

intermediaries.

– an interactive online taxpayer portal.b

In case the system does not identify

The tax system should be simplified in

non-compliance with filing and payment

a way that leads to increased certainty

requirements, tax officials may be

and stability of tax norms, which is

involved dishonestly and illegally in

a powerful instrument to minimize

the identification of those taxpayers and

corruption.

identification of non-filers, stop-filers,

2.2

countries, the tax administration mainly

High

thereby negotiate “bribes” with taxpayers. The reconciliation process poses a revenue fraud risk if the process is operated manually with human intervention.

Note: Dedicated tax facilitation centers: a tax official, trained and particularly selected, is assisting a visiting taxpayer with online application at the contact centers to help taxpayers who wish to file electronically but who do not have access to computers; b Interactive taxpayer portal: defined as an interactive question-answering system which emerges at the intersection of question-answering and dialogue systems, which allows users to find the answers to questions in an interactive way. During the answering process, the automatic system can initiate a dialogue with the user in order to clarify missing or ambiguous information, or suggest further topics for discussion. a

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Curbing corruption in tax administration  163

Figure 12.3

Tax arrears management processing

ment in its pursuit of increasing taxpayer voluntary compliance and facilitate the tax administration’s aim of getting “the right tax at the right time” (Lethbridge, 2013). Tax administrations carry out tax audit functions between headquarters and field offices. While the field office is a focal point of taxpayer services between the tax administration and the taxpayer community, tax auditors interact with the taxpayers in conducting tax audits. Since the auditors are required to interact with the taxpayers to perform audits, tax audit

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164  Handbook on corruption, ethics and integrity in public administration Table 12.3 Ref.

Corruption risk map of tax arrears management procedures

Selected key tax

Likely

administration

risk level

Analysis on risk or threat of corruption

Possible remedial measures

operations 3.1

Tax officials are assigned to taxpayers based on

The filing—payment—tax arrears

methods to deal with

territorial allocation and apply non-standardized

management processes must be

the debtors with the

tailored debt installment options to the debtor.

operated by separate dedicated

pre-programmed

Head of tax office is authorized to make installment

units under the territorial tax

interventions.

and/or start strong enforcement action for cases. This offices.

Case management

High

gives the opportunity for responsible tax officials to

Develop a centralized debt

corrupt.

management policy in dealing with debtors, which is regulated by the administrative acts. This methodology applies the same treatment measures (maturity, reduction) and recovery techniques to taxpayers, who are in the same situation.

3.2

Arrears collection enforcement.

High

Unsustainable enforcement actions taken by tax

Establish an electronic garnishee

officials and lack of integrated real-time electronic

system to recover money directly

garnishee system leads to creating opportunities for

from debtors’ bank accounts,

corruption.

by integrating with the banks and other relevant government agencies such as asset and real estate land registries and vehicle registries.

function is ranked the most corruption function in tax administration in terms of corruption risks. Hence, reforms of tax administration should aim to have an automated internal and external system to control and monitor the auditors’ responsibilities and proceed the process to reducing the vulnerabilities and opportunities for rent seeking. Tax audit processes have the following key components. ●● ●● ●● ●● ●●

selection of taxpayers for tax audit; execution of tax audit; audit closure; post-audit activities; and alternative dispute resolution activities.

Tax Appeals Some tax administrations have an excessive volume of tax appeals, often due to the complexity of tax laws and procedures, and are therefore prone to risks of corruption (Figure 12.6 and Table 12.5). A credible and predictable resolution process is the cornerstone of an efficient tax administration system since the cost of a complex and long litigation process is costly for both

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Curbing corruption in tax administration  165

Figure 12.4

Tax audit selection processing

the taxpayer and tax administration sides. Tax disputes may arise from the following situations (Thuronyi et al., 2013), among others: 1. The outcomes of tax audits are disputed. 2. The taxpayer does not want to accept the assessment made by the tax administration. 3. Administrative errors in the calculation of penalties (miscalculation, double taxation, tax base).

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166  Handbook on corruption, ethics and integrity in public administration

Figure 12.5

Tax audit execution process

4. Administrative errors in taxation (wrong person or taxpayer, period, tax subject). 5. The facts are in dispute. 6. There are issues regarding the interpretation of the tax provisions, thus requiring a decision by the relevant tax courts. Tax disputes can be resolved in three main ways: (1) alternative dispute resolution institutions before the tax audit is concluded; (2) alternative dispute resolution institutions at the end of the

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Curbing corruption in tax administration  167 Table 12.4 Ref.

Corruption risk map of tax audit selection and execution procedure

Selected key tax

Likely risk

Analysis on risk or threat of

administration

level

corruption

Possible remedial measures

operations 4.1

There is a need for risk assessment to

Selection of taxpayers for High

The main risk is the manipulation

tax audit.

of audit selection for financial gains be used in selecting cases for tax audit. by tax officials. Tax officials can

Taxpayers are selected using system-based

take advantage of manual selection methods based on the objective criteria or random selection through

(pre-programmed) and data to identify the

unautomated selection processes in most risky for tax audit. order to grant not being selected for The model assesses the relative position tax audit.

of each taxpayer among its colleagues operating in comparable conditions (in terms of business sector, size and region of operation) for a number of (risk) factors and then identifies the deviation of each taxpayer’s unique position from the

4.2

Assigning the tax auditor

Medium

in charge.

overall pattern of each (risk) factor. There is a risk that corruption in tax Cases selected for tax audit should be administration may take place in

assigned to the tax auditors based on

a more organized manner with tax

workload using some indicators, taking

officials and taxpayers colluding

into consideration the nature of the

to evade taxes. Well-connected

assignment. On notification, tax auditors

companies try to intervene in the

identified to conduct in an assignment

assignment process to be audited by should assess their relationship with the less experienced tax auditor.

the audited taxpayers and its staff and determine whether there are any circumstances that could potentially impair their independence or objectivity

4.3

Tax auditor can take advantage of

while conducting the tax audit. An internal management system should be

standardization in the

non-standardized procedures, or

developed to standardize the execution of

execution of tax audit.

technical complexity of disputed

tax audits by tax auditors and the senior

issues in the execution of tax audit

management team, which will facilitate

Ensuring the

High

by overriding procedures for a bribe the investigation of corruption and limit or vice versa. Closure of a tax audit tax auditors’ discretionary powers. without any reassessment being made or penalties being imposed for an evaded liability.

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168  Handbook on corruption, ethics and integrity in public administration Ref.

Selected key tax

Likely risk

Analysis on risk or threat of

administration

level

corruption

Medium

During the audit, tax auditors can

Possible remedial measures

operations 4.4

Communication with the

Develop an external, interactive taxpayer

auditee taxpayer during

override (or vice versa) examination audit portal to communicate with the

the tax audit.

procedures for performing

head of the audit department, chairman

cross-check activities with the

of the tax administration and dedicated

auditee taxpayer and third parties

unit, aimed at enhancing ethics and

for a bribe. Without well-designed

integrity within the tax administration and

hearing processes, tax auditors may government. manage the process alone.

The primary role of taxpayer communication portals is to provide contact management services during tax audits for the audited taxpayers, tax audit managers and senior management team. Taxpayers could use the portal to inquire about the status of the tax audit. The taxpayer audit portal should support tax audit function and allow taxpayers to send their requests directly to the senior

4.5

Disputes can arise during the audit

management team. Establish a report-evaluation commission

during the audit

and taxpayers want to solve this

to ensure the standard operation procedure

procedure.

issue before the audit is concluded

and discuss technical issues regarding the

due to the high cost and long

facts and disputed issues.

Dealing with disputes

High

procedure of the litigation process. 4.6

Dealing with disputes

High

The audit procedure concludes

Settlement/conciliation could be used in

at the end of the audit

with the proposed tax reassessment the context of formal negotiation created

procedure.

by the tax auditor, opening up the

by legislation to reach an agreement and

opportunities and motivations for

terminate the dispute with the taxpayer

both taxpayers and tax officials to

before or after realization of the tax

engage in corrupt behavior.

assessment. In case of disagreement, there is a settlement mechanism within the tax administration to solve the disputed issue as an alternative dispute resolution.

tax audit within the tax administration; and (3) appeals to the court. Tax legislation provides that a taxpayer can contest assessments issued by the revenue authorities.

REFORM MEASURES IN DESIGNING THE ANTI-CORRUPTION ACTION PLAN AND SUCCESSFUL COUNTRY STORIES Risks of corruption may be generated either by the weaknesses inherent in the tax administration’s own internal procedures or external factors in the framework in which the tax administration operates. Crucial to designing a tax administration anti-corruption strategy is the identification of bottlenecks that hinder tax administration processes and creating opportunities for corruption. In the area of organization and processes, the development

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Curbing corruption in tax administration  169

Figure 12.6

Tax appeal process

of an anti-corruption strategy requires determining the specific risks of corrupt behavior at the various stages of the tax administration business process. An analysis of the corruption opportunities of the tax administration business process and the development of a risk map are prerequisites for the design of an anti-corruption strategy. Governments are currently undertaking a series of reforms to fight against corruption in the area of tax administration. Table 12.6 presents selected country cases.

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170  Handbook on corruption, ethics and integrity in public administration Table 12.5 Ref.

Corruption risk map in tax appeals procedure

Current situation

Likely risk

Analysis

Recommendations

level 5.1

Due to the high cost of court

The tax appeals commission is an

the audit within the tax

proceeding, tax litigation

independent statutory body and has sole

administration or external

process poses a high risk with

responsibility for accepting or refusing

body during the pre-court

its complexity, uncertainty

appeals although revenue can raise

process.

and unpredicted outcomes,

complaints to appeals.

Dealing with disputes after

High

which creates opportunities for corruption. 5.2

Decision-making process by the taxpayer.

Medium

The appeal process is

Transparency of tax litigation process

time-bound, thus resulting in

and unclarity in the potential outcomes.

speedy resolution of appeals.

Establish a tax appeal portal publishing

This is a key requirement of

court decision, which enables taxpayers

the efficiency of the dispute

to find relevant decisions as needed by

resolution process for both the

sector, theme, issues, tax provision, etc.

taxpayer and tax administration.

CONCLUSION Corruption in tax administration exerts a detrimental impact on not just revenue collection, but even more so, on growth and equity. Its root causes are multiple and therefore designing an effective anti-corruption strategy is inherently complicated and multi-faceted. Regardless of the specific shapes and forms of an anti-corruption program, thorough diagnostics of the institutional and procedural weaknesses as well as vulnerabilities in the core functions of tax administration—and based on such diagnostic outcomes, the development of a functional risk map—become prerequisites for the design of any workable anti-corruption strategy. This chapter aims to add value in the existing body of literature on corruption in taxation by offering a roadmap for designing anti-corruption programs based on risk mapping of key business functions. It is worth highlighting, on the other hand, that enhanced risk mapping even though critical serves only part of the overall solution. As global experience indicates, curbing corruption in tax administration can never succeed with just an isolated short-term vision or without a comprehensive, “whole of government” approach to target a broader set of governance initiatives (see, for example, Le, 2007). In taxation, anti-corruption measures would ultimately boil down to reducing the opportunities for rent seeking. These would require the setting of coordinated organizational and legal reform actions, ranging from simplifying the overall tax system to automating specific business processes. To conclude, we suggest that further research be extended in the direction that would deepen business process reengineering based on finer analyses of the multiple faces of motives and opportunities for corruption. The six core dimensions of such targeted business process enhancement consist of: (1) mapping operational corruption risks; (2) simplifying the tax laws and procedures to facilitate administration and reduce compliance costs; (3) adopting digital technologies; (4) establishing an effective tax control and audit procedure; (5) strengthening the institutional governance using a three-pronged approach anchored upon human resource development, organizational restructuring and performance management system; and (6) creating effective communication channels and political commitment to reform.

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Curbing corruption in tax administration  171 Table 12.6

Country-specific programs for mitigating corruption risks in tax administration

Country

Guiding principle

Reform approach

Georgia

Introduction of

By 2003, rampant corruption involving tax evasion, illegal tax credits and theft of

comprehensive tax

government tax revenue had left public finances in a shambles. A policy of zero tolerance

administration reforms

for corruption was adopted and the tax system has been simplified through the smart use of an information management system to improve compliance and fight corruption. By 2008, Georgia’s tax revenue to GDP ratio had doubled to 25 percent. The key lessons derived from Georgia’s experience include: (1) for tax reforms to be successful, they must be driven by both the tax administration leadership and the overriding government leadership; (2) in order to curb corruption, there must be a transformation of mindset of both tax administrators and taxpayers; (3) early success of tax reforms must be matched with visible improvement in public service delivery in order to ensure sustainability of achievements; (4) tax administrators must be empowered to perform their duties without political interference; (5) tax laws and reforms must be applied uniformly to all taxpayers; and (6) salary increments for tax administrators must be matched with an increased probability of detection of corruption and guaranteed termination of employment should a tax administrator be found guilty of corruption (Magumba, 2019).

Australia

Development of tax

Tax office guidelines for understanding and dealing with the bribery of Australian and

office guidelines for tax foreign public officials form part of the instruction manuals for tax staff and include officers

instructions on referring suspicions to the police as well as useful additional information that can help in dealing with such cases (OECD, 2012).

Zambia

Political commitment

The Zambia Revenue Authority has introduced a number of initiatives designed to

to increased level of

increase taxpayers’ awareness of tax laws, customs rules and regulations. These include

integrity

publication of information brochures and posters, development of a public website and regular participation in public radio programs (Fjeldstad, 2005).

Bolivia

Business process

A recent and relatively successful anti-corruption strategy on value-added tax refunds

improvement

conducted in Bolivia applied a process flow approach that appears to be powerful in preventing corruption in tax administration.

India

Automation of tax

IT is used to reduce corruption in several tax areas. The Computer-Aided Administration

management system

of Registration Department (CARD) replaced manual procedures that lacked transparency in property valuation and resulted in a flourishing business for brokers and middlemen, who exploited citizens buying or selling property. The CARD system replaces the manual services with computerized services and introduces several new services. It eliminates interaction with tax officers. It completes registration formalities within an hour, through electronic delivery of all registration services. It improves the quality of services offered by providing a computer interface between citizens and the government. Computerization has ensured transparency in the system and made the life of ordinary citizens easier (Purohit, 2007).

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172  Handbook on corruption, ethics and integrity in public administration Country

Guiding principle

Reform approach

Turkey

Reengineering of the

In Turkey, the central database receives input from four primary sources: the value-added

business process and

tax return, a list of suppliers, a list of customs declarations and a list of export invoices.

use of automation

This information, in conjunction with the taxpayer’s application for a refund, is fed into

through value-added

the central database and analyzed and a value-added tax refund control report is issued to

tax self-enforcing

the tax offices. One of the exceptional parts of the value-added tax risk model is the use

mechanism

of reports of purchase/sales forms to analyze additional suppliers in the transaction chain. This is a very important aspect of the model because, in most cases, fictitious companies are hidden under the claimants’ suppliers. Typically, they disappear after they issue false invoices for a couple of months. Therefore, detecting them as soon as possible in the transaction chain is vital for spotting false value-added tax refunds (Dogan, 2011).

Tajikistan

Adoption of digital

Modernization of IT infrastructure and the introduction of a unified tax management

technologies

system mean increased efficiency, with reduced physical interaction between tax officials

Introduction of

and taxpayers. The rate of e-filing is now as high as 87.4%, with 97.2% of all legal

electronic tax filing

entities and 77.8% of individual entrepreneurs filing their tax returns electronically. The new system enables the tax committee to generate the data necessary for its analytical work, and to improve reporting and tax assessments. Around 200 electronic kiosks are being built and equipped in remote locations around the country to help taxpayers who wish to file electronically but who do not have access to computers. This will help ensure that the tax committee can receive local taxes in time and with less cost. The likelihood and impact of e-filing adoption varies across firms with low and high risks of tax evasion by reducing opportunities for collusion between taxpayers and tax officials. Such programs have led to a substantial increase in tax collection and a reduction in corruption cited in business surveys.

NOTES 1. How do you define corruption? Transparency International, 2018: www​.transparency​.org/​what​-is​ -corruption​#define (accessed October 20, 2019). 2. Anti-corruption challenge, International Monetary Fund: https://​ imfilab​ .brightidea​ .com/​ ANTICORRUPTION (accessed October 20, 2019). 3. Taxpayers are any persons (natural persons or legal entities) registered for tax purposes, who are obliged to pay or collect, deduct or remit any of the taxes in terms of the respective tax legislations, or who are required to provide information to the tax administration. 4. The entity or individual person is responsible for paying taxes and fulfilling the tax obligations defined in the law. 5. Potential taxpayers are persons who are registered in the system with a tax identification number but who are not taxpayers or responsible persons.

REFERENCES Akdede, S. (2006). Corruption and Tax Evasion. Dogus University Journal, 7 (2), 141–9. Awasti, R. & Bayraktar, N. (2014). Can Tax Simplification Help Lower Tax Corruption? Washington, DC: World Bank. Cheng, D. & Zeng, Q. (2017). The Correlation between Corruption, Tax Compliance and Tax Loss. Journal of Chinese Tax and Policy, 7, https://​www​.business​.unsw​.edu​.au/​About​-Site/​Schools​-Site/​ Taxation​-Business​-Law​-Site/​Documents/​9​-Cheng​-and​-Zeng​-ATTA2018​.pdf (accessed May 2020). Crawford, D. (2013). Detailed Guidelines for Improved Tax Administration in Latin America and the Caribbean. Washington, DC: USAID.

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Curbing corruption in tax administration  173 Dogan, U. (2011). Data Warehouse and Data-Mining Tools for Risk Management: The Case of Turkey. In: M.S. Khwaja, R. Awasthi & Jan Loeprick (Eds), Risk-Based Tax Audits: Approaches and Country Experiences. Washington, DC: World Bank, pp. 71–6. Dos Santos, P. (1995). Corruption in Tax Administration. Presented at the Twenty-Ninth Annual Assembly of the Inter-American Center of Tax Administrators. Evans, C., Krever, R. & Alm, J. (2017). Tax and Corruption: A Global Perspective. Journal of Tax Administration, 3 (2), 124–7. Fjeldstad, O. (2005). Corruption in Tax Administration: Lessons from Institutional Reforms in Uganda. Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing. International Monetary Fund (IMF). (2019). Fiscal Monitor: Curbing Corruption. Washington, DC: IMF. Le, T. Minh (2007). Combating Corruption in Revenue Administration: An Overview. Washington, DC: World Bank. Lethbridge, C. (2013). Detailed Guidelines for Improved Tax Administration in Latin America and the Caribbean. Washington, DC: USAID. Low, P. (1995). Preshipment Inspection Services. WBDP/278. Washington, DC: World Bank. Magumba, M. (2019). Tax Administration Reforms: Lessons from Georgia and Uganda. ICTD African Tax Administration Papers. Masud, A. & Alkali, M. (2015). Tax Complexity and Tax Compliance in Pre and Post Self-Assessment System Implementation in Nigeria. Sokoto Journal of Management Studies, 9, 102–12. OECD. (2012). Tax Administration: Detecting Corruption. Paris: OECD Publishing. Okello, A. (2014). Managing Income Tax Compliance through Self-Assessment. Washington, DC: IMF. Okunogbea, O. & Pouliquenb, V. (2018). Technology, Taxation, and Corruption: Evidence from the Introduction of Electronic Tax Filing. Washington, DC: World Bank. Pashev, K. (2005). Corruption and Tax Compliance: Challenges to Tax Policy and Administration. Sofia: Center for the Study of Democracy. Purohit, M. (2007). Corruption in Tax Administration. Washington, DC: World Bank. Rahman, A. (2009). Tackling Corruption through Tax Administration Reform. Washington, DC: World Bank. Schoueri, L. & Barbosa, M. (2013). Transparency: From Tax Secrecy to the Simplicity and Reliability of the Tax System. British Tax Review, 5, 666–81. Šumah, Š. (2018). Corruption, Causes and Consequences. IntechOpen Publication. Tanzi, V. & Davoodi, H. (2000). Corruption, Growth and Public Finances. WP/00/182. Washington, DC: IMF. Thuronyi, V., Counsel, L. & Espejo, I. (2013). How Can an Excessive Volume of Tax Disputes Be Dealt With? Washington, DC: IMF.

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13. Corruption and administration in environmental protection Rob White

INTRODUCTION This chapter explores the nature of corruption in relation to environmental crime. The impact and consequences of environmental crimes and harms on a planetary scale are growing and are becoming ever more devastating. For example, exploitation of species (plant and non-human animal) and destruction of ecosystems and landscapes (including specific features such as rivers and mountain tops) are leading to the further demise of the living and non-living. Biodiversity is rapidly diminishing, and waterways and oceans are being despoiled. The scope and scale of the problem is widening daily – illegal fishing is a global problem; deforestation is a global problem; air, land and water pollution is a global problem – such that the transnational character of environmental crime is fundamental to the harms with which it is associated. Behind the commission of many environmental crimes lies corruption. This can involve specific acts such as bribery in the public and private sectors, embezzlement, influence peddling, abuse of functions and illicit enrichment. It may refer more generally to unethical and self-interested behaviour. For the purposes of this chapter, corruption is defined in two ways (White, 2017: 56). Corruption relating to the environment is interpreted as implying both moral corruption (involving the undermining of trust and respect for established governmental processes and institutional practices, as guided by democratic oversight) and/or direct corruption (involving direct breaches of criminal laws, facilitated by government officials and non-government actors). Environmental crime refers to transgressions against humans, specific environments and plant and animal species. It is typically defined on a continuum ranging from strict legal definitions through to incorporation into broader harm-based perspectives. It includes specific types of crime such as air, water and land pollution, illegal disposal of electronic waste, wildlife trafficking, illegal fishing and illegal deforestation. Depending upon perspective it can also include harms that have yet to be officially criminalised, such as activities that diminish biodiversity and that contribute to global warming. A distinction can be drawn between environmental crimes defined by illegality and serious harms that hitherto have been unrecognised under law as illegal, but which nonetheless are of great interest to criminologists and others working in this area. The main concern of this chapter is with environmental crimes that are legally defined as such, that are associated with natural resource extraction and that involve some element of corruption in their execution. Environmental harms are furthered by politicians who make bad decisions, corporate groups that seek to maximise profits, local citizens who take more than they sustainably should and bureaucrats who find themselves under enormous pressure to satisfy competing stakeholders especially from powerful sectoral interest groups. Sometimes people make bad decisions because they are bribed to do so. Sometimes they do so because 174 Rob White - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:46PM via The University of British Columbia Library

Corruption and administration in environmental protection  175 they have conflicts of interest or fail to fully appreciate the gravity and nature of the harm (as in the case of ‘folk crimes’ like illegal hunting or fishing in rural communities). Some engage in corrupt behaviour in order to make money for themselves, their families or their mates (business acquaintances or friends). Bad decisions in this instance are decisions that are made against the public interest and for illegal and/or unethical political gain or financial profit. What follows are some of the challenges in the environmental space that face public administration. In this area more than in most there is an intersection of civil service, politicians, corporations and organised crime. In part this is due to the substantive importance of the environment, and particularly resource extraction, to many economies. For example, in Australia, the resource-extraction industries – such as forestry, coal and gas, mining and water for irrigation – are key employment generators and economic benefit multipliers. This translates into a different dynamic for public servants when dealing with the challenges of environmental crime and environmental regulation. There are many specific interests at play, and some of these are powerful indeed. The challenges associated with environment resource use and management are evident at different levels across the bureaucratic spectrum. Many people are implicated in these processes – scientists, clerical officers, customs inspectors, accountants, tax collectors, fisheries officers, border personnel, parks and wildlife officers, environmental protection officers and so on. Moreover, the number and expertise of these public servants who collect data, apply scientific knowledge, issue permits, inspect sites, count revenue, invest in infrastructure, measure outcomes and enforce compliance are dictated not only by manifest ecological and social obligations surrounding environmental resources, but political context, fiscal considerations, legislative parameters and legal frameworks, and business responses to allied matters such as taxation and ‘green tape’. Untangling the roles and duties of, as well as the pressures on, those engaged in public administration in natural resource management areas warrants close scrutiny and ought to be the subject of a larger work. For present purposes, however, this chapter provides a short survey of some situations in which civil servants and others are implicated in corrupt and unethical activities involving particular environmental and social outcomes.

NATURAL RESOURCES AND ENVIRONMENTAL CRIME Much attention within the relevant criminological literature on environmental crime is directed at how, where and why natural resources are used, and the impacts of this on the wider environment. This includes consideration of: ●● natural resource extraction and, in particular, what is being extracted, how and for what purposes (for example, trees from forests, water from rivers, fish from oceans); ●● contamination related to natural resources (such as pollution of streams and creeks from factories) and the threat posed by stockpiles of toxic and hazardous materials (for example, mine tailings dams); and ●● transformations in nature that have potentially harmful consequences (for example, clearing land for flex crops (for example, multi-use plants such as palm oil) and building dams, both of which affect water flow and land use).

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176  Handbook on corruption, ethics and integrity in public administration The most common environmental crimes fall into two broad categories: natural resources crimes (e.g., trees and animals) and pollution crimes (e.g., contamination and toxic waste). Yet, even these environmental crimes frequently embody a certain ambiguity. The label of environmental crime tends to be applied to specific activities that are otherwise lawful or licensed (e.g., cutting down trees, pulling fish from the ocean) since these are viewed as not being intrinsically criminal or ‘bad’. It is the context that makes something allowable or problematic. Institutionally, government oversight and regulation of natural resources occurs in a sector that is wide ranging. It can include, for example, matters pertaining to agriculture, climate and environment, water, fisheries, forestry, mining, wildlife and land use. Within this sector there are many different stakeholders. At an official level, these include industry and firm representatives, scientists, farmers, fishers, government regulators and political leaders. In some instances, non-government organisations (NGOs) may be accorded official powers and status (for example, in dealing with the welfare of animals), and diverse interest groups (such as recreational fishers and surfers) may be part of public dialogue about natural resource use and environmental consequences (for example, the impact of salmon farms). The complexity of the sector is heightened by the fact that much environmental harm occurs not only within but across governmental borders, hence increasing the need for multi-agency and cross-border collaboration. Most environmental harm is intrinsically transnational since it is by nature mobile and easily subject to transference. The classic case of this is air pollution. For example, 2015 saw the worst ever smoke haze over Indonesia, Malaysia and Singapore, extending to Thailand and the Philippines. This was caused by illegal fires started in peatland and forest on Indonesia’s Sumatra Island and the Indonesian part of Borneo. The fires were started in order to cheaply clear land for palm oil and pulp and paper plantations. The illegal trade in wildlife is similarly transnational in character. Environmental crimes in Asia, for example, involve countries that are engaged in various forms of global transfers – of animals and plants, fish and other creatures of the sea, and forest products (see for examples, Lundgren, 2012; Joines, 2012; Setiono, 2007; Zhang et al., 2008; Wong, 2019). Specific countries and specific regions experience different types of wildlife crime (in relation to Vietnam, for example, see Cao, 2017). Much illegal wildlife trafficking involves Asian consumers as the main markets for commodities sourced elsewhere. For example, a rhinoceros product (especially the horn) makes its way from various African countries to destinations such as Vietnam, China and Hong Kong, for the purposes of traditional medicine and/or as a (mythical) cancer cure. Abalone is illegally trafficked from Australia to food markets in Hong Kong and Japan. Tiger skins are taken through Nepal and Tibet to mainland Chinese cities (Wong, 2019). Illegal wildlife trade is not the only threat to particular animal species. The intense competition for food worldwide is also evident in the ways in which commercial fishing takes place. The issue here is not only that of biodiversity, but of wholesale destruction of major breeding grounds and fishing beds. The greatest negative impact to the long-term sustainable management of global fisheries is a combination of illegal, unreported and unregulated fishing (Petrossian and Clarke, 2014). This may involve huge factory ships that operate on the high seas, and which process thousands of tons of fish at any one time. Alternatively, it may be organised around dozens of smaller vessels, each of which is contracted to provide a catch that ultimately brings reward to the originating contractor. In other words, such production can be organised according to the economies of scale (e.g., factory ships) or the economies of scope

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Corruption and administration in environmental protection  177 (e.g., small independent fishers). In each case, however, there is a link to legitimate markets (e.g., for abalone, for crayfish, for fish) so that the value of the commodity can be realised in dollar terms. It has been estimated that illegal fishing losses in the Asia-Pacific are in the range of 16 per cent of the overall annual catch (Meere, 2009). Notably, countries in the region also constitute significant markets for illegally sourced fish and seafood. The complexity of environmental crime is related to geography, ecology and political governance. The laws and rules guiding action on environmental crime vary greatly at the local, regional and national levels, and there are overarching conventions and laws that likewise have different legal purchase depending upon how they are translated into action in each specific local jurisdiction. In part, differences in law-in-practice and conceptions of what is an environmental crime stem from the shifting nature of what is deemed harmful or not. Also relevant to the study of environmental crime is the notion of ‘cross-over’ crime. This refers to interlinked crimes that include environmental offences. An example of this is human trafficking and persons being forced into virtual slavery on illegal fishing boats (UNODC, 2011). Environmental crimes such as wildlife trafficking occur alongside other serious offences, including theft, fraud, corruption, drugs and human trafficking, counterfeiting, firearms smuggling and money laundering (Wyatt, 2013). Another related aspect of this is the involvement of organised crime groups. Criminal networks involved in environmental and related cross-over crimes are many and varied (Ayling, 2013). Some are involved in transporting and trading more than one commodity at a time. Such crimes also demand access to and use of money-laundering facilities and financial institutions (Setiono, 2007). Importantly, specific commodities (such as tiger skins, rhino horns and elephant ivory) require an integrated network that links the point of origin to the point of sale, even though the gatherers/producers and consumers/clients may be disparate and unconnected. This demands local knowledge of poaching practices and communal contexts, as well as transit routes and venues for opportunistic exchanges (Wong, 2019). Particularly in relation to cross-border crime the operational success of criminal networks involves conscious, intentional criminality and, where required, the paying of bribes to appropriate government officials in regards illegal logging, illegal wildlife and other environmental crime commodities. The corrupt engagement of government officials, including those at the front end of environmental law enforcement (e.g., customs officials, local police), is likewise part of the overall picture of environmental crime (Setiono, 2007; INTERPOL, 2015).

NATURAL RESOURCES AND CORRUPTION Corruption and natural resource extraction have long gone hand in hand, especially in the wildlife and forestry sectors. In these sectors corruption is evident in activities such as payment of bribes to government officials or politicians for preferential treatment, extortion by officials from operators to artificially legalise illegal operations, evading national regulations with relative impunity and bribing customs and border security personnel to ignore smuggling (Van Dinh, 2012; INTERPOL and UNEP, 2016). But corruption always occurs in specific places, involves specific actors and involves concrete activities such as bribery and abuse of office. The nature and extent of corruption will vary from country to country and situation to situation, as will the officials working in enforcement, detection, prosecution, the judiciary and policy making who are implicated in corruption (UNODC, 2012).

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178  Handbook on corruption, ethics and integrity in public administration Arguments to the contrary notwithstanding (‘it does not happen here’), corruption is ubiquitous and global – that is, it is a Western as well as non-Western phenomenon (see Whyte, 2015). For example, moral and legal corruption is evident in places such as Australia, and especially in regards the natural resources extraction industries (White, 2017). The specific dynamics of corruption may vary, but the core problem of corrupt business dealings is extensive. In a similar vein, there is an interrelationship between the causes and consequences of environmental harm on a world scale, and environmental crime is only part of this overarching picture. The bulk of environmental crime-related transfers involve the movement of valued commodities from vulnerable communities and nation-states to more powerful nation-states and privileged classes. By and large, it is the South feeding the appetites of the North. Timber, fish, wildlife and minerals tend to flow from source countries through transit countries to countries of destination, where those with the money (corporations and high-status groups and individuals) can purchase what they wish. Many countries are simultaneously transit and destination countries, just as they may well harbour the ‘victims’ of environmental harm as well as the ‘offenders’ who perpetrate environmental harms. For example, China is not only a major destination country for e-waste, it is also one of the highest e-waste generators in Asia – thus, it is both a source of and a destination for e-waste. In a similar vein, Vietnam, China and Hong Kong are destination countries for illegal wildlife. It is consumer demand in these countries that fosters the exploitation of animals elsewhere, from South Africa, Australia and New Zealand for example. Deforestation in Indonesia may be bolstered by government bio-fuel policies in Europe, but the resulting pollution nonetheless affects many of its Asian neighbours. Moreover, China and India are, themselves, major importers of flex crops, thereby contributing to the problem of deforestation stemming from changing land uses. The flipside of corruption is regulation. What companies can or cannot do is very much dictated by the laws and regulatory regime in place that guide natural resource use and extraction. Short of direct corruption, there are many ways in which lack of adequate regulation can itself be seen as a form of corrupted practice. For instance, in supporting economic development, the state can cut costs and encourage business growth by narrowing the scope of its purview and involvement in regulation. This reduction can take several different forms, such as cuts in state resources allocated to environmental audits (e.g., botany mapping), or the censoring of scientific information which may be publicly sensitive for specific industries (e.g., fishing, forestry, mining) or for private contract partners of government (e.g., water treatment plants, power station operators). The state nevertheless has a formal role and commitment to protect citizens from the worst excesses or worst instances of environmental victimisation. Hence, the introduction of extensive legislation and regulatory procedures designed to give the appearance of active intervention, and the implication that laws exist which actually do deter such harms. The existence of such laws may be encouraging in that they reflect historical and ongoing struggles over certain types of business activity. In the specific area of environmental regulation, the role of government remains central, even if only by the absence of state intervention. The general trend has been away from direct governmental regulation and toward ‘softer’ regulatory approaches. This, too, opens the door to corrupted governmental processes. Consider, for example, the notion of regulatory capture. The concept of regulatory capture refers to the situation where a government agency is domi-

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Corruption and administration in environmental protection  179 nated by the very businesses and corporations it is meant to be regulating. For instance, Simon (2000) describes many instances in which the United States Environmental Protection Agency (EPA) seemed to be more concerned with protecting corporate interests than protecting the environment. An example of this was a study that showed that the EPA devoted more of its resources in terms of time and money in the early 1990s to exempt corporations from its regulations than it did to enforce the regulations. Today, this phenomenon of regulatory capture is most obviously manifest in the administration of President Donald Trump who, upon election, systematically appointed pro-industry officials to key environment and natural resource portfolios (such as Scott Pruitt, who had filed lawsuits against the EPA in support of business while Oklahoma Attorney-General, to head up the EPA).

SPECIFIC ENVIRONMENTAL CRIMES This section provides illustrations of various kinds of corruption associated with the exploitation of natural resources. The examples are drawn from different national contexts and deal with diverse types of activities and commodities (such as fish, water and wildlife). A distinction is made between direct corruption and illegal actions, and unethical and corrupted practices. Direct Corruption and Illegal Actions Wildlife trafficking The illegal trade in wildlife involves the trading of non-human animals (alive or dead, in whole or in part) and plants (including seeds) that is expressly prohibited in international convention and domestic laws. This is very much transnational in scope, as recognised by authorities in Europe and Asia amongst other places, and is frequently seen to involve corruption. For example, from the point of view of the European Union: It is acknowledged that corruption is an important driver for wildlife trafficking and that it seems to occur at every stage of the value chain. More precisely, corruption happens in source countries on the level of poaching, preparation and selling. In transit regions, the steps of concealment, cross border smuggling and fraudulent documentation need corrupted actors. Finally in destination countries, corruption plays an important role in documentation, storage, consumption and sales. (EUCPN, 2019: 21)

In a similar vein, studies of illegal wildlife trade and the nature of border smuggling in countries such as China, Russia, Uganda and Morocco have highlighted the prevalence of corruption in particular countries, in particular locations and in regards particular commodities, as well as the way in which lack of training and human resources contributes to the problem (Wyatt, 2013; Wong, 2019). Wyatt et al. (2018) observe that corruption associated with wildlife trafficking occurs within the context of three structural elements: where agents within the criminal justice system collude with criminal groups (for example, taking bribes to acquit smugglers or to permit them to cross borders); where there are weak financial institutions and failure to enforce money

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180  Handbook on corruption, ethics and integrity in public administration laundering and tax evasion laws; and where there is lack of political will to enforce laws and strong measures directed against wildlife trafficking. Forests Deforestation is a major issue and is occurring in tropical forests located in countries such as Indonesia, Malaysia, Thailand and Myanmar, with substantial negative biodiversity impacts (UNEP, 2013). Estimates of illegal logging account for about 25 per cent of removals worldwide (Setiono, 2007: 27). It has been estimated that the Greater Mekong region, a major source of the world’s biodiversity, has lost nearly one third of its forests in the past four decades and that Cambodia loses its forests at the rate of over 2,000 square kilometres a year (Ghosh, 2015). In the Asian context, much of this illegal logging occurs with the involvement of corrupt government officials, including law enforcement officers, financial institutions and backers, and businesspeople who import timber or wood-base products. Bribery and ‘goodwill’ payments, smuggling, illicit trafficking, money laundering and forging of documents are all part of the illegal logging industry (Setiono, 2007; Cao, 2017). China is the biggest consumer of stolen timber in the world, and like Singapore is a major transport hub, as well as destination country. Unethical and/or Corrupted Processes Fishing The largest producer of farm-raised salmon in Australia, Tassal, has come under considerable criticism for its environmental impact. Despite this, since 2014 the Aquaculture Stewardship Council and the World Wildlife Fund (WWF) have certified it consistently as a sustainable business. Looking at the nature of specific NGO–corporate partnerships, it has been observed that the WWF has long had a transactional relationship with Tassal involving a paid corporate consultancy on the part of the WWF (Bleakley, 2019). Namely, in return for a substantial yearly payment (in the order of AUD$500,000), Tassal received both consultancy support and exclusive rights to the use of the WWF logo in the Tasmanian aquaculture industry. The unethical behaviour can be applied two ways, to the company and to the NGO: the loose regulations governing environmental NGOs has compromised the eco-labeling system and has contributed to a situation in which a company, such as Tassal, is able to misrepresent the true state of its environmental credentials. While it is not a crime for an environmental NGO, such as the WWF, to receive money from a business to use its logo, these organizations can become complicit in perpetuating a form of fraud on the buying public – one in which consumers are greenwashed into believing that the product they are purchasing is verified as sustainable, when it is not. (Bleakley, 2019)

Another instance of ethically suspect action relates to Timor-Leste, but this time in relation to illegal fishing. In 2017, a large fleet of Chinese fishing boats was caught out by police in Timor-Leste with thousands of dead sharks on board – evidence of illegal fishing on a massive scale. The 15 boats and their Chinese crew were impounded and detained, while prosecutors investigated their activities and prepared a legal case against them. However, it was later reported that ‘inexplicably, East Timor’s District Court in Baucau has now released the crew without charge and allowed them to take the boats back to China – in return for a US$100,000 guarantee – on the grounds the crew did nothing wrong’ (Barker, 2018). The sharks were

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Corruption and administration in environmental protection  181 apparently not confiscated but allowed to go back to China with the boats, where they would have been worth millions of dollars. Timor-Leste is not, however, a signatory to the CITES convention, which prohibits fishing of endangered species. Nonetheless, spokespeople from Sea Shepherd argued that several breaches of the fishing license occurred. Moreover, if the Chinese boats had not broken the law, then why would they pay the money. Questions were also raised as to where and whom precisely the money was paid (Barker, 2018). Water regulation In July 2017, an Australian Broadcasting Corporation Four Corners investigation revealed a series of improper conducts pertaining to the Murray-Darling Basin, the largest fresh-water system in Australia (ABC Four Corners, 2017). Four Corners is a long-running investigative current affairs television program produced by the national public broadcaster. Specifically, it was alleged that in New South Wales: ●● huge amounts of water were being diverted (stolen) for use by large agriculture companies upstream – more than they were entitled to (1.1 billion gigalitres for one property alone); ●● there was pump tampering and failure to keep diaries and logs; ●● the top regulator in New South Wales had offered to help lobbyists campaign against the Murray-Darling Basin plan (by sending de-identified government documents to industry people); and ●● the Strategic Investigations Unit in New South Wales was disbanded at precisely the time when it was asking for more resources to address significant problems (compliance was moved out of the relevant government department). The broadcast led to no less than eight official inquiries into these issues (Murray-Darling Basin Authority, 2017; Craik, 2018), involving federal and state agencies, anti-corruption and water management groups, the New South Wales ombudsman and the South Australian Murray-Darling Basin Royal Commission. In addition to these sub-sectors there are lessons to be learned from corruption in the administration of forests, oil and gas and mining (White, 2017) just to mention some domains.

CONCLUSION For civil servants in the natural resource sector there are many challenges in dealing with corruption. These pertain to models of intervention (e.g., from soft compliance to ‘big stick’ approaches), regulatory frameworks (e.g., pyramid or tool-box approaches), integrity in management (e.g., ethics and internal monitoring systems), whistleblowing and anonymous response systems (i.e., identification of problems and violators), political interference (e.g., regulatory capture) and raising awareness generally of issues of public interest and concern (e.g., education and civilian engagement). What complicates these issues in regards environmental harm is the fact that much of the corruption and criminality in this area also has transnational aspects. As noted earlier, many of the operational matters pertaining to environmental crimes are inherently international in scope and substance. Networks are geographically based (for example, known transit points and destinations in Asia), discipline-based (for example, envi-

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182  Handbook on corruption, ethics and integrity in public administration ronmental prosecutors) and commodity-based (for example, wildlife) (Pink and Bartel, 2015). Collaboration across these dimensions and involving these networks can be predominantly horizontal, vertical or diagonal (Pink and White, 2016). International calls to fight corruption are resonating in places such as South East Asia, in part because there are regional pressures building up to stop activities that are demonstrably hurting people in nearby countries, such as the lighting of illegal fires in Indonesia to facilitate crop substitution. In response to these pressures, there now exists in Indonesia the Financial Investigative Unit and the Indonesian Anti-Corruption Agency, both of which have engaged in training courses offered by the United Nations Office of Drugs and Crime, with positive results in regards to the detection, investigation and prosecution of illegal logging (Nellemann et al., 2014: 90). Other initiatives have included measures such as enhanced use of the timber-tracking database system through to the participation of local communities as ‘barefoot investigators’, particularly in the national parks and forest reserve areas (Santoso, 2012). Efforts to combat environmental crimes of this sort have included stakeholders such as enforcement agencies, the public at large and NGOs. Moreover, in Indonesia there has been the use of anti-corruption laws to catch and indict members of the so-called ‘forest mafia’ (comprised of government officials working in conjunction with private companies) who have been found guilty of corruption in the forestry sector (Fariz, 2012: 32). This is especially significant insofar as: In many provinces and districts, illegal logging leading to rapid deforestation has not only been carried out by illegal companies, but also by legitimate businesses that acquired legal concessions. Legal companies, including mining and palm oil companies, have obtained concession permits from governors and regents to clear the state forestlands and then convert them illegally to mining sites and palm oil plantations. (Fariz, 2012: 31)

Corruption which is generally seen to be detrimental to national development constitutes one of the major limitations of existing environmental law enforcement efforts globally (Graycar and Felson, 2010; Akella and Allan, 2014). The fight against corruption is nonetheless today part of international political discourse. Countries and regional associations such as the European Union are responding to these international calls to fight corruption, as are agencies such as Interpol and the United Nations Office on Drugs and Crime. A number of NGOs are also well-known whistleblowers and critics of corruption (see, for example, Global Witness, 2015). By increasing the number of agencies, actors and professional experts engaged in environmental crime efforts, there is greater potential to respond more robustly to corruption (White, 2017). What is needed, therefore, is an integrated program of intervention that incorporates several dimensions. These include, for instance, further development of inter-agency collaborative approaches to environmental law enforcement, and specifically the opportunities and promise of the NEST model recently developed by INTERPOL as a preferred model of intervention; consideration of the specific role and value-adding to law enforcement offered by NGOs, and by whistleblowers (situated in both government and NGO agencies) in exposing and addressing issues of corruption, money flows and crime detection and response effectiveness; and enhancing the levels and types of specialisation in dealing with environmental crimes required for effective law enforcement in this area, across the spectrum of detection, investigatory, prosecution and adjudication activities.

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Corruption and administration in environmental protection  183

REFERENCES ABC Four Corners (2017) ‘Pumped: Who’s benefitting from the billions spent on the Murray-Darling’, 24 July. www​.abc​.net​.au/​4corners/​pumped/​8727826. Accessed 10 January 2019. Akella, A. and Allan, C. (2014) Dismantling Wildlife Crime: Executive Summary. Washington, DC: World Wildlife Fund. Ayling, J. (2013) ‘What sustains wildlife crime? Rhino horn trading and the resilience of criminal networks’, Journal of International Wildlife Law and Policy, 16 (1): pp. 57–80. Barker, A. (2018) ‘“Something is not right”: How $US100,000 ensured a million-dollar illegal catch was forgotten in East Timor’, Australian Broadcasting Corporation News, 30 June. Bleakley, P. (2019) ‘Big fish, small pond: NGO–corporate partnerships and corruption of the environmental certification process in Tasmanian aquaculture’, Critical Criminology, https://​doi​.org/​10​.1007/​ s10612​-019​-09454​-8. Cao, N. (2017) Timber Trafficking in Vietnam. London: Palgrave Macmillan. Craik, W. (2018) Report of the independent reviewer: Basin compliance compact to the Murray-Darling Basin Ministerial Council. Canberra, ACT: Murray-Darling Basin Authority. European Crime Prevention Network (EUCPN) (2019) European Crime Prevention Monitor 2019/2: Environmental Crime. Brussels: EUCPN. Fariz, D. (2012) ‘Corruption in forest crimes’, in Corruption, Environment and The United Nations Convention Against Corruption. Vienna: United Nations Office on Drugs and Crime. Ghosh, N. (2015) ‘Tackling timber and wildlife trafficking’, Straits Times. www​.straitstimes​.com/​asia/​ se​-asia/​tacking​-timber​-and​-wildlife​-trafficking. Accessed 30 July 2015. Global Witness (2015) How Many More? 2014’s Deadly Environment: The Killing and Intimidation of Environmental and Land Activists, with a Spotlight on Honduras. London: Global Witness. Graycar, A. and Felson, M. (2010) ‘Situational prevention of organised timber theft and related corruption’, in K. Bullock, R. Clarke and N. Tilley (eds), Situational Prevention of Organised Crimes. Portland, OR: Willan. INTERPOL (2015) Environmental Crime and Its Convergence with other Serious Crimes. Lyon: INTERPOL. INTERPOL and UNEP (2016) Strategic Report: Environment, Peace And Security: A Convergence of Threats. Lyon: INTERPOL. Joines, J. (2012) ‘Globalization of e-waste and the consequences of development: A case study of China’, Journal of Social Justice, 2: pp. 1–15. Lundgren, K. (2012) The Global Impact of E-waste: Addressing the Challenge. Geneva: SafeWork and SECTOR, International Labor Office. Meere, F. (2009) ‘Assessment of the impacts of illegal, unreported and unregulated (IUU) fishing in the Asia-Pacific’. http://​publications​.apec​.org/​publication​-detail​.php​?pub​_id​=​103. Accessed 10 August 2013. Murray-Darling Basin Authority (2017) The Murray-Darling Basin Water Compliance Review. Nellemann, C., Henriksen, R., Raxter, P., Ash, N. and Mrema, E. (eds) (2014) The Environmental Crime Crisis: Threats to Sustainable Development from Illegal Exploitation and Trade in Wildlife and Forest Resources. Nairobi: United Nations Environment Programme and GRID-Arendal. Petrossian, G. and Clarke, R. (2014) ‘Explaining and controlling illegal commercial fishing: An application of the CRAAVED theft model’. British Journal of Criminology, 54: pp. 73–90. Pink, G. and Bartel, R. (2015) ‘Regulator networks: Collaborative agency approaches to the implementation and enforcement of environmental law’, in P. Martin and A. Kennedy (eds), Implementation of Environmental Law. Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing. Pink, G. and White, R. (2016) ‘Collaboration in combating environmental crime: Making it matter’, in G. Pink and R. White (eds), Environmental Crime and Collaborative State Intervention. Basingstoke: Palgrave Macmillan. Santoso, T. (2012) ‘Indonesia’s national strategy to combat illegal logging and corruption’, in Corruption, Environment and the United Nations Convention Against Corruption. Vienna: United Nations Office on Drugs and Crime. Setiono, B. (2007) ‘Fighting illegal logging and forest-related financial crimes: The anti-money laundering approach’, in L. Elliot (ed.), Transnational Environmental Crime in the Asia-Pacific: A Workshop Report. Canberra: Australian National University.

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184  Handbook on corruption, ethics and integrity in public administration Simon, D. (2000) ‘Corporate environmental crimes and social inequality: New directions for environmental justice research’, American Behavioral Scientist, 43 (4): pp. 633–45. United Nations Environment Programme (UNEP) (2013) ‘Threats to biodiversity’. www​.unep​-wcmc​ .org/​threats​-to​-biodiversity​_52​.html. Accessed 4 September 2013. United Nations Office on Drugs and Crime (UNODC) (2011) Transnational Organized Crime in the Fishing Industry. Vienna: United Nations. United Nations Office on Drugs and Crime (UNODC) (2012) Wildlife and Forest Crime Analytic Toolkit. Geneva: ONODC. Van Dinh, T.T. (2012) ‘Addressing corruption in the environmental sector: How the United Nations Convention against Corruption provides a basis for action’, in Corruption, Environment and the United Nations Convention Against Corruption. Vienna: United Nations Office on Drugs and Crime. White, R. (2017) ‘Corruption and the securitisation of nature’, International Journal for Crime, Justice and Social Democracy, 6 (4): pp. 55–70. Whyte, D. (ed.) (2015) How Corrupt Is Britain? London: Pluto Press. Wong, R. (2019) The Illegal Wildlife Trade in China. London: Palgrave Macmillan. Wyatt, T. (2013) Wildlife Trafficking: A Deconstruction of the Crime, the Victims, and the Offenders. Basingstoke: Palgrave Macmillan. Wyatt, T., Johnson, K., Hunter, L., George, R. and Gunter, R. (2018) ‘Corruption and wildlife trafficking: Three case studies involving Asia’, Asia Journal of Criminology, 13 (1): pp. 35–55. Zhang, Li, Hua, N. and Sun, S. (2008) ‘Wildlife trade, consumption and conservation awareness in Southwest China’, Biodiversity Conservation, 17: pp. 1493–516.

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14. Studying police integrity Sanja Kutnjak Ivković

INTRODUCTION Stories of police corruption, particularly when widespread and systematic, are cover-page news. They show how police officers, public servants entrusted to enforce the law, instead abuse their position for personal gain. When David Burnham, a former New York Times journalist, decided to publish the story of police corruption among the New York City Police Department police officers in the 1970s, a chain of events that unfolded illustrated the gravity of the problem it uncovered. Realization that police corruption is widespread and systematic, yielding millions of dollars in illegal gain, as Frank Serpico initially stated to Burnham, resulted in the establishment of the Knapp Commission (1972), a systematic investigation of police corruption, numerous arrests of police officers, and a reform of the police department. Twenty years later, the arrest of Michael Dowd, a former New York City Police Department officer who became a drug dealer and earned ten times his salary from his illegal transactions, and his colleagues in 1992 by the Suffolk County Police, resulted in the revelations of the close connection between the police and organized crime, convictions and lengthy prison sentences, a scandal, the establishment of the Mollen Commission (1994), and another extensive reform of the police department. The Rampart Division scandal in the later 1990s in Los Angeles, implicating more than 70 police officers in a range of corrupt activities, from stealing and selling narcotics, planting false evidence, committing bank robberies, and perjuring themselves, shook the country yet again and resulted in disciplinary actions against 24 police officers, closing of the police CRASH unit, reopening and eventually an overturn of over 100 prior criminal convictions, filing over 140 civil law suits against the City of Los Angeles, and settlements in over $125 million (PBS, 2012). Police corruption is not limited to the United States. Two Australian independent commissions demonstrate its severe consequences. The Australian Fitzgerald Inquiry (Fitzgerald Commission, 1989, p. 216) engaged in a systematic investigation of police and political corruption in Queensland, providing evidence of corruption sufficient to generate numerous prosecutions and convictions of top-ranked Queensland police officers. The report of the Wood Royal Commission (1997), tasked to investigate the systemic and entrenched nature of police corruption within New South Wales, revealed that police detectives were regularly paid to protect a ring of pedophiles. In the aftermath, numerous police officers were arrested, Peter Ryan from the United Kingdom was hired to oversee the reform upon realization that the top administrators are too compromised by their own misconduct and ties to corrupt police officers to conduct the reform themselves, and the New South Wales laws were revised. Thus, various independent commissions (e.g., Knapp Commission, 1972; Mollen Commission, 1994; Wood Commission, 1997), scholarly studies (e.g., Kane and White, 2009; Kutnjak Ivković, 2003), and case studies of police corruption (e.g., Kutnjak Ivković et al., Forthcoming) provide ample evidence that police officers engage in various forms of police corruption. While it is clear that some police officers sometimes violate official rules and 185 Sanja Kutnjak Ivković - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:48PM via The University of British Columbia Library

186  Handbook on corruption, ethics and integrity in public administration engage in police corruption, more precise insights into the prevalence and degree of severity of such behavior are anything but, in no small part because obtaining accurate information is riddled with challenges. Policing is an occupation rife with opportunities for corruption; as Klockars and colleagues argue (2004, 2006), it is a discretionary activity that typically occurs outside of supervisors’ oversight and before witnesses who lack credibility, are unwilling to report misconduct because of the code of silence, or have motives not to report because they engage in police corruption themselves (Kutnjak Ivković, 2003). Prior scholarly studies attempting to measure the extent and nature of police misconduct illustrate these problems. Martin (1994) and Knowles (1996) both experienced very strong resistance from the police officers to any study of police misconduct and, because of opposition from the police unions, had to change their research strategy and drop from their projects a number of data-collection sites, including the City of Chicago and the State of Pennsylvania. Similarly, Fabrizio (1990) asked experienced police officers attending the Federal Bureau of Investigation police academy about police corruption; unlike all of the other questions, characterized with very high response rates, questions about corruption were returned blank. This chapter discusses the theory of police integrity and the related methodology, developed to circumvent the challenges associated with direct measurement of police corruption by studying instead its opposite—police integrity. The chapter outlines the basic assumptions of both the police integrity theory and the police integrity methodology. Although the police integrity approach has been used extensively over the last 25 years to measure the contours of police integrity in over 30 countries, only a handful of prior studies have used this approach to measure the contours of police integrity over time. This chapter contains an empirical exploration of the contours of police integrity in Croatia, an East European country in transition, over a period of 14 years. We measure whether the way in which the society at large has been dealing with corruption has affected police officers’ views of police corruption and their willingness to report it.

THEORY OF POLICE INTEGRITY To avoid the problems associated with direct measurement of police corruption, Klockars and Kutnjak Ivković (2004) have opted to measure its opposite—police integrity. Police integrity is defined as “the normative inclination among police to resist temptations to abuse the rights and privileges of their occupation” (Klockars et al., 2006, p. 1). The theory of police integrity (e.g., Klockars and Kutnjak Ivković, 2004; Klockars et al., 1997, 2000, 2004, 2005, 2006; Kutnjak Ivković, 2015a) rests on the premise that the causes of police integrity are organizational and societal. The first dimension of the theory focuses on the official rules and the way they are made by the police administration, communicated to the police officers, and enforced by the police administrators (e.g., Klockars and Kutnjak Ivković, 2004; Klockars et al., 1997, 2000, 2004, 2005, 2006; Kutnjak Ivković, 2015a; Kutnjak Ivković and Haberfeld, 2019). Official rules regulating proper police behavior and prohibiting police misconduct could range from the constitutional norms and legal statutes to the police agency official rules and the code of ethics (e.g., Kutnjak Ivković, 2015a). What differs across police agencies is the extent to which official rules regulate police misconduct, the way these official rules are made, how often they

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Studying police integrity  187 are enforced, and how familiar police officers are with, and supportive of, the official rules (Kutnjak Ivković, 2015a). Hence, a police agency of high integrity is an agency in which the official rules prohibiting police misconduct have been established and are taught, internalized, and supported by the police officers (e.g., Kutnjak Ivković, 2015a). The second dimension of the theory links police integrity with the control mechanisms used by the police agency to detect and investigate police misconduct (e.g., Klockars and Kutnjak Ivković, 2004; Klockars et al., 1997, 2000, 2004, 2005, 2006; Kutnjak Ivković, 2015a; Kutnjak Ivković and Haberfeld, 2019). These control mechanisms could include proactive internal methods, such as education in ethics, integrity testing, and early warning systems, as well as more traditional reactive control methods, such as internal investigation and discipline of police officers (e.g., Kutnjak Ivković, 2015a). Therefore, police agency of high integrity utilizes both reactive and proactive mechanisms of control regularly and does so consistently (e.g., Klockars and Kutnjak Ivković, 2004; Klockars et al., 2000, 2006; Kutnjak Ivković, 2015a). The third dimension of the theory links police agencies’ efforts to curtail the code of silence—an informal rule in the police culture that prohibits police officers from reporting misconduct conducted by fellow police officers (e..g, Mollen Commission, 1994)—with the level of police integrity (e.g., Klockars and Kutnjak Ivković, 2004; Klockars et al., 1997, 2000, 2004, 2005, 2006; Kutnjak Ivković, 2015a; Kutnjak Ivković and Haberfeld, 2019). Klockars and colleagues (2000, p. 2) proposed that the parameters of the code of silence, namely what behavior is protected by the code and to whom this protection extends, vary across police agencies. Kutnjak Ivković and Haberfeld (2019) argue that the police agency’s efforts in curtailing the code of silence directly relate to the contours of police integrity in the police agency. Hence, a police agency of high integrity is an agency characterized by a weak code of silence that does not protect serious forms of police misconduct (e.g., Kutnjak Ivković, 2015a). The fourth dimension of the theory links social, political, economic, and legal conditions in the society at large with the level of police integrity in the police agency (e.g., Klockars and Kutnjak Ivković, 2004; Klockars et al., 1997, 2000, 2004, 2005, 2006; Kutnjak Ivković, 2015a; Kutnjak Ivković and Haberfeld, 2019). According to the theory, societies at large shape the level of police integrity in their police agencies by establishing, teaching, and enforcing the laws, creating and operating external control systems, and fostering a culture intolerant of misconduct by governmental employees. Therefore, a police agency of high integrity is an agency that embraces positive, integrity-inducive societal conditions and minimizes the effect of negative, integrity-challenging societal conditions (Kutnjak Ivković and Haberfeld, 2019).

MEASUREMENT OF POLICE INTEGRITY The theory of police integrity is accompanied by an empirical approach that allows scholars and police administrators to measure the contours of police integrity. Originally developed by Klockars and Kutnjak Ivković (2004), it rests on the premise that it is possible to ascertain the contours of police integrity systematically and empirically while avoiding the pitfalls that direct measurement of police misconduct would likely engender. Toward that goal, Klockars and Kutnjak Ivković (2004) have focused on measuring police integrity or the level of intolerance for misconduct in the police organization (e.g., Kutnjak Ivković and Haberfeld, 2019). Instead of asking direct questions about the prevalence and nature of police misconduct,

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188  Handbook on corruption, ethics and integrity in public administration Klockars and colleagues ask questions of fact and opinion about police integrity less likely to result in such resistance (e.g., Klockars and Kutnjak Ivković, 2004; Klockars et al., 1997, 2000, 2004, 2005, 2006; Kutnjak Ivković, 2015a; Kutnjak Ivković and Haberfeld, 2019). The approach is based on hypothetical scenarios describing various forms of police misconduct. The first questionnaire that Klockars and Kutnjak Ivković (2004) designed, the police corruption questionnaire, was envisioned to measure the opposite of police corruption. It contains 11 scenarios, of which nine are examples of police corruption. The second questionnaire developed by Klockars and colleagues (e.g., Kutnjak Ivković and Haberfeld, 2019) broadened the scope of inquiry to other forms of police misconduct. It contains 11 scenarios describing a range of different forms of police misconduct. Upon reading each of the hypothetical scenarios, the respondents were asked seven identical questions (e.g., Klockars et al., 2000, 2004, 2006). Three questions contain measures of the first dimension of the theory, assessing the respondents’ familiarity with the official rules and their support for the official rules. Although the questionnaire does not measure directly the quality of the internal control mechanisms, that is, the second dimension, it contains two questions related to the control mechanisms. These questions focus on the respondents’ perceptions of the appropriate and expected discipline. The questionnaire incorporates two measures of the third dimension of the theory pertaining to the code of silence. The questions tap into the respondents’ willingness to report misconduct and their perceptions of the likelihood that other police officers would report. Finally, the questionnaire does not contain any measures of the fourth dimension, so these measures would need to be developed separately (e.g., Kutnjak Ivković and Haberfeld, 2019).

MEASURING POLICE INTEGRITY OVER TIME The theory of police integrity and the related methodology were developed over two decades ago and have been used by scholars to explore the contours of police integrity in over 30 countries (e.g., Klockars et al., 2004, 2006; Kutnjak Ivković, 2015a; Kutnjak Ivković and Haberfeld, 2019). Yet, the overwhelming majority of extant studies have measured police integrity at a particular point in time. By contrast, very few studies have engaged in the measurement of police integrity over time. Klockars and colleagues (2006, p. 137) highlighted the importance of repeated applications of the police corruption questionnaire and the police integrity questionnaire: The simplest way to employ a second survey as a test of the reliability of the earlier inquiry is what is sometimes called a “test-retest” strategy. It involves distributing a second survey after sufficient time has passed for respondents to forget the answers they had given on a first survey and then comparing the results. If answers to the same question on both surveys are identical, or differ only in ways that are explainable by some obvious event, it is evidence that respondents are answering honestly.

To achieve this goal, they incorporated several scenarios from the police corruption questionnaire into the police integrity questionnaire (see the Methodology section for details; Klockars et al., 2006). The first application of the police integrity methodology over time occurred soon thereafter; Klockars and colleagues (2006) compared the responses provided by the police officers from three police agencies surveyed about two years apart using the two versions of the question-

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Studying police integrity  189 naire. Although there were no statistically significant differences between the results on the police corruption questionnaire and the police integrity questionnaire administered two years apart in Charleston and Charlotte-Mecklenburg, Klockars and colleagues (2006) reported significant differences in such views in St Petersburg, but only for one scenario. The change in the police officers’ assessment of the acceptance of gratuities detected by the empirical results was a consequence of the new approach toward the acceptance of gratuities developed by the police administration during this time period. Kutnjak Ivković and Sauerman (2012) traced the contours of the code of silence among police officers in South Africa. Like Klockars and colleagues (2006), Kutnjak Ivković and Sauerman (2012) focused on the six scenarios used in both versions of the questionnaire and reported that the respondents’ own willingness to adhere to the code of silence seemed somewhat weaker in 2010/11 than it was in 2005. This change did not affect their perceptions of how likely most police officers in their agencies would be to report misconduct. Similarly, Khechumyan and Kutnjak Ivković (2015) examined the contours of the code of silence among Armenian police officers and found that the code of silence might have weakened in the period of about five years (2008/2009 to 2013). The most recent study of changes in the police integrity-related views over time (Van Droogenbroeck et al., 2019) measured the short-term effects of specific police training on the police officers’ integrity views; one month after the training was completed, the respondents’ estimates of misconduct seriousness and willingness to report remained about as high as they were immediately after the training, and both were higher than before the training had commenced. The police integrity theory and methodology could be adjusted to assess changes in not only police officer views, but also public views about police misconduct. Kutnjak Ivković and colleagues (2019) assessed the potential changes in the public views about police misconduct over a period of two decades (1996 versus 2016). The results uncovered that the students surveyed in 2016 perceived police misconduct as more serious, supported more severe discipline, and seemed more likely to report misconduct than their counterparts in 1996 did. However, the differences across the two cohorts in the assessments of how police officers would evaluate misconduct were not nearly as pronounced.

METHODOLOGY The Questionnaire The first police corruption questionnaire focused almost exclusively on one form of police misconduct—police corruption (e.g., Klockars et al., 1997, 2000, 2004). Following Roebuck and Barker’s typology of corruption (1974), nine scenarios included in the questionnaire described a range of corruption activities, from the acceptance of gratuities and internal corruption to shakedown and theft. In addition, there is a scenario describing off-duty employment and a scenario describing the use of force. To address the problem of measuring only the resistance to the for-gain misconduct (i.e., police corruption), the second version of the questionnaire (Klockars and colleagues, 2005, 2006)—the police integrity questionnaire—contains a wider range of forms of police misconduct, from the use of excessive force (four scenarios) and police corruption (five scenarios), to planting of evidence and falsification of the official report (two scenarios).

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190  Handbook on corruption, ethics and integrity in public administration After the police officers participating in the study read the description of each scenario, they were asked a series of identical questions. While the wording of the questions was the same in all versions of the questionnaire, the answers were not always identical. The first pair of questions inquired about the perceptions of misconduct seriousness. The first question focused on the respondents’ own evaluations of misconduct seriousness, and the other question asked the respondents to estimate how serious “most police officers in your police agency” would evaluate them. The respondents could pick an answer from a five-point scale, ranging from 1 = “not at all serious” to 5 = “very serious.” The next pair of questions targeted the respondents’ views about discipline. The first question asked about the respondents’ views about the approprite discipline, while the second question asked the respondents about discipline they expect their agency to mete out. The offered answers are dependent upon the legal options available at the time. The police corruption questionnaire used in 1995 had only five choices (“no discipline,” “public reprimand,” “fine,” “period of suspension,” and “dismissal”) and the police integrity questionnaire, used in Croatia in 2009, had six disciplinary options (“no discipline,” “public warning/reprimand,” “fine in the amount of 10% of the employee’s salary,” “fine in the amount of 20% of the employee’s salary,” “no promotion in rank for 2–4 years,” “no advancement in service for 2–4 years,” “reassignment into a lower-ranked assignment,” and “dismissal”). We have reclassified answers to create four categories in each version of the questionnaire (“no discipline,” “reprimand,” “harsher discipline other than dismissal,” “dismissal”). The last two questions focused on the code of silence. The first question teased out the respondents’ own willingness to report misconduct, while the follow-up question asked the respondents to estimate how likely most police officers in the police agency would be to report the misconduct. The respondents could pick an answer from a five-point scale, ranging from 1 = “definitley would not report” to 5 = “definitely would report.” To entice the respondents’ truthful answers, Klockars and colleagues (e.g., 2000, 2004, 2005, 2006) included only a few demographic questions, focusing on the respondents’ length of service in policing, their assignment, and supervisory position. Then, the respondents were asked whether most police officers filling out the questionnaire would answer honestly. The last question inquired whether the respondents themselves told the truth while filling out the questionnaire. The Samples The first sample, collected in 1995 (e.g., Kutnjak Ivković and Klockars, 1998, 2004), is a stratified random sample of 41 police agencies, selected in a way that closely represents the national distribution of police agencies by region, size, and type (Kutnjak Ivković and Klockars, 1998). Border police and specialized police agencies were excluded from the sample frame. The resulting sample of 1,649 police officers is a representative national sample. The second sample, collected in 2009 (e.g., Kutnjak Ivković, 2015b), is also a stratified random sample, covering 22 police agencies selected in a way that closely resembles the classification of police administrations and police agencies (see, e.g., Kutnjak Ivković, 2015b). Specialized police stations (e.g., border police, maritime police) were excluded from the sampling frame. The stratified sample includes 966 police officers and 176 additional police officers throughout the country assigned to community policing, comprising a representative national sample of 1,142 police officers.

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Studying police integrity  191 At the time the data were collected in 1995, Croatia had just implemented “Flesh,” a major military operation, and, less than three months later, would engage in an even more encompassing military operation, “Storm.” Both military operations included not only the Croatian military, but also the police. When the war broke out in Croatia in the early 1990s, the police were the only legitimate agency with the right to use coercive force. The Croatian Parliament passed the statute that established the National Guard Corps as a police service within the Croatian Ministry of the Interior (e.g., Kutnjak Ivković, 2000; Kutnjak Ivković and Klockars, 2004) and the process of hiring a large number of police officers followed immediately. For the next two years, the police performed both the defense role and the regular police role (Kutnjak Ivković, 2000). The war had many negative consequences, including the relaxation of official rules and the strengthening of the code of silence among the police (see, e.g., Kutnjak Ivković, 2004). The end of the military conflict, the peaceful reintegration of the remaining part of Croatian territory, and the transition toward a democratic society and the police followed in the later 1990s and early 2000s. During this period, a range of economic, social, legal, and political transitions occurred in the society at large (Kutnjak Ivković, 2000, 2004, 2015b). Croatia’s Transparency International Corruption Perceptions Index gradually improved from 2.7 in 1999 to 4.4 in 2008, suggesting that the country was perceived as less corrupt over time. The circumstances seem to have worsened over the next few years, though, with the score declining to 4.0 in 2011. The majority of the Croatian citizens participating in the late 2000s Transparency International survey estimated that the level of corruption in the country had increased in the previous three years (Transparency International, 2011) and evaluated the government’s efforts to deal with corruption as ineffective (2011, p. 47). The 2011 United Nations Office on Drugs and Crime study provided further support that corruption remained a problem; about one third of the respondents thought that the level of corruption had increased over the previous two years and about one half perceived that the level of corruption had remained the same (UNODC, 2011, p. 44). The strongest motivator to deal with corruption in the country was the possibility of accession to the European Union, which eventually occurred in 2013, five years after our second survey. These changes in the society at large also affected the police; new laws were enacted that dramatically changed the definition of the police role and the police functions (Police Law, 2000, 2011). The police were officially defined as the “public service within the Ministry of the Interior entrusted to perform the tasks enumerated by the law” (Police Law, 2000, Article 2). In addition, the new laws, such as the Police Law (2000, 2011) and the Code of Criminal Procedure (1997, 2008), imposed more stringent regulations on the police rights and duties and regulated police discipline (Kutnjak Ivković, 2015b). Despite the enactment of the new laws regulating police conduct, Kutnjak Ivković (2015b) argued that their consistent and uniform enforcement remained a challenge.

DEMOGRAPHIC CHARACTERISTICS OF THE SAMPLE Demographic characteristics of the two samples (Table 14.1) reflect the development of the Croatian police. Because the Croatian police was established in the early 1990s, it is not surprising that over three quarters of the respondents (76%; Table 14.1) in the 1995 sample had been police officers for five years or fewer. On the other hand, most of the police officers in

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192  Handbook on corruption, ethics and integrity in public administration Table 14.1

Sample characteristics 1995 sample (%)

2009 sample

Chi-square

Phi

1,017.45***

.647

591.57***

.503

9.79**

-.064

90.73***

.193

117.82***

.220

(%) Length of service Up to 5 years

75.5

13.4

6–10 years

8.9

9.6

11–15 years

7.6

33.3

16–20 years

6.0

38.4

Over 20 years Assignment

2.0

5.3

Patrol

44.3

34.7

Investigation

11.2

15.4

Communication

15.7

4.2

Traffic

22.6

4.2

Administration

1.4

1.7

Community policing

4.8

25.6

Other Supervisory position

0.0

14.1

Yes

20.1

15.2

No Others told the truth

79.9

84.8

Yes

80.8

63.6

No Respondent told the truth

19.2

36.4

Yes

100.0

91.8

No

0.0

8.2

Note: * p < .05; ** p < .01; *** p < .001.

the 2009 sample had between 11–15 or 16–20 years of experience (33.3% and 38.4%, respectively, Table 14.1). The most dominant assignment in both samples is patrol, with traffic as the second most frequent assignment in the 1995 sample and community policing as the second most frequent assignment in the 2009 sample. About one fifth of each sample consists of supervisors; therefore, the majority of the respondents are line officers. When asked whether other police officers would tell the truth while filling out the questionnaire, over two thirds of both samples answered affirmatively, but the 1995 sample was more likely to assume that other officers would tell the truth than the 2009 sample was (Table 14.1). Finally, when asked whether they had answered truthfully, virtually all respondents in the 1995 sample and over 90 percent in the 2009 sample answered affirmatively. The respondents who had stated that they lied were excluded from further analyses.

RESULTS Evaluations of Corruption Seriousness The respondents first provided estimates of corruption seriousness (Table 14.2). In the majority of the scenarios, both samples evaluated corruption as serious; the mean values are above

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Studying police integrity  193 the scale mid-point of 3.0 and toward the serious side of the scale for four scenarios in the 1995 sample and six scenarios in the 2009 sample. In five out of six scenarios, statistically significant differences indicate that the respondents in the 2009 sample evaluated corruption as more serious than the respondents in the 1995 sample did. An analysis of the mean values of the respondents’ estimates of other police officers’ evaluations of seriousness of police corruption revealed that the respondents in both samples assumed that their peers would evaluate most examples of corruption as serious. However, a comparison across the two groups revealed statistically significant differences in five out of six scenarios (Table 14.2); compared to the respondents in the 1995 sample, the respondents in the 2009 sample assumed that most police officers in their agency would be more likely to evaluate corruption as serious in four out of five scenarios with statistically significant differences. Although their own evaluations of seriousness for a theft from a crime scene are very similar (i.e., not statistically significantly different), the respondents from the 1995 sample were more likely to assume that other police officers would evaluate them as more serious than the respondents in the 2009 sample were (Table 14.2). A comparison of relative perceptions of seriousness, that is, how serious corruption described in one scenario is evaluated compared to the corruption described in other scenarios in the questionnaire, reveals substantial similarities in the respondents’ own evaluations of seriousness across the two groups (Spearman’s rho = .886, p < .05); both evaluated the acceptance of gratuities and the police drink driving (DUI) as the least serious in the questionnaire, and the theft from a crime scene and the acceptance of a bribe from a motorist caught speeding as the most serious (Table 14.2). Similarly, there is a substantial similarity across the two groups in the respondents’ evaluations of how most police officers would evaluate corruption seriousness (Spearman’s rho = .886, p < .05); both evaluated the acceptance of gratuities and the police DUI as the least serious in the questionnaire and theft from a crime scene and the acceptance of a bribe from a motorist caught speeding as the most serious (Table 14.2). Views about Discipline There was only one scenario—the acceptance of gratuities—in which the majority of the respondents in the 1995 sample thought that a police officer should receive no discipline at all (Table 14.3). There was no scenario in which the majority of the respondents in 2009 thought that the police officer should not be disciplined. On the other hand, in none of the scenarios did the majority of the respondents in 1995 think that dismissal was the appropriate discipline, although in one scenario—describing a theft from a crime scene—close to one half thought that dismissal might be appropriate. By contrast, a slight majority of the respondents in the 2009 sample found dismissal appropriate for two scenarios (Table 14.3). Some of the differences between the two groups of respondents in the respondents’ views about appropriate discipline are very prominent. For example, in three scenarios (gifts; police DUI; kickback), the difference between the percentage of the respondents in the 1995 sample and the percentage of the respondents in the 2009 sample who thought that the police officer should not be disciplined at all or should receive only a reprimand was in excess of 10 percent (24% for gifts; 10% for police DUI; 11% for kickback). Similarly, there were two scenarios (kickback; speed) in which the difference between the percentage of the respondents in the 1995 sample and the percentage of the respondents in the 2009 sample who thought that the police officer should be dismissed was in excess of 10 percent (13% for kickback; 30% for

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4

2

3

Scenario 3: Supervisor 4.09

Scenario 4: Police DUI 2.79

3.86

4.47

Scenario 5: Kickback

Scenario 6: Speed

Note: * p < .05; ** p < .01; *** p < .001.

5

6

4.72

1

2.13

Scenario 2: Theft

Own seriousness 1995 sample Mean Rank

4.68

4.41

3.02

4.34

4.78

3.38

5

4

1

3

6

2

2009 sample Mean Rank

Estimates of seriousness

Scenario 1: Gifts

Table 14.2

-5.40***

-11.46***

-3.76***

-5.38***

-2.04*

-.21.95***

t-test

-.21

-.55

-.23

-.25

-.06

-1.25

Diff.

3.91

3.50

2.65

3.76

4.38

2.09

5

3

2

4

6

1

Others’ seriousness 1995 sample Mean Rank

4.17

3.87

2.79

3.67

4.22

2.89

5

4

1

3

6

2

2009 sample Mean Rank

Diff. -.80 .16 .09 -.14 -.37 -.26

t-test -15.92*** 3.97*** 1.81 -2.61** -7.19*** -5.61***

194  Handbook on corruption, ethics and integrity in public administration

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Studying police integrity  195 Table 14.3

Views about appropriate discipline No discipline

Public

Harsher

(%)

reprimand (%)

discipline (%)

1995 sample

62.5

23.3

12.1

1.9

1

2009 sample Scenario 2: Theft

21.6

40.4

31.8

6.2

3

1995 sample

1.7

4.1

46.5

47.7

6

2009 sample Scenario 3:

0.6

3.9

43.1

52.4

6

Dismissal (%) Rank

Scenario 1: Gifts

Supervisor 1995 sample

19.7

30.5

38.4

11.4

3

2009 sample Scenario 4: Police

17.6

25.9

50.6

5.9

2

DUI 1995 sample

31.9

36.6

28.4

3.

2

2009 sample Scenario 5:

29.1

29.7

38.4

2.8

1

Kickback 1995 sample

10.5

20.6

51.1

17.7

4

2009 sample Scenario 6: Speed

7.2

13.3

48.7

30.8

4

1995 sample

2.3

12.6

63.7

21.3

5

2009 sample

2.3

3.9

42.4

51.3

5

Chi-square

Phi

393.25***

.413

8.82*

.062

42.77***

.137

26.28***

.107

65.84***

.169

242.93***

.324

Note: * p < .05; ** p < .01; *** p < .001.

speed). Both types of examples point toward the 2009 sample as more accepting of disciplining police officers when they engage in corruption and, when corruption is more serious, disciplining harsher. The second discipline-related question targeted the respondents’ views about expected discipline—the discipline they expect the police administration to administer. The respondents’ views about expected discipline tend to be more similar than they were for their own views about appropriate discipline (Tables 14.4 and 14.5). Specifically, there were two (not three) scenarios (gifts; police DUI) in which the difference between the 1995 respondents and the 2009 respondents who expected no discipline or only reprimand was in excess of 10 percent. Similarly, there is only one scenario (not two) in which the differences were above 10 percent for dismissal (Table 14.4). A comparison of the relative order of scenarios based on the percentage of respondents who thought that discipline should or would be appropriate, capturing relative assessments of how harsh discipline should and would be for each scenario compared to the other scenarios in the questionnaire, indicates a high degree of similarity across the two groups of respondents (Spearman’s rho = .829, p < .05 for appropriate discipline; Spearman’s rho = .771, p < .10 for expected discipline). Perceptions of the Code of Silence The results show that the code of silence was present among the respondents from both groups, but it was stronger among the respondents from the 1995 sample (Table 14.5). In particular, in

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196  Handbook on corruption, ethics and integrity in public administration Table 14.4

Views about expected discipline No discipline

Public

Harsher

(%)

reprimand (%)

discipline (%)

1995 sample

53.4

26.6

17.5

2.4

1

2009 sample Scenario 2: Theft

26.7

28.2

36.6

8.6

3

1995 sample

1.8

3.9

44.3

50.0

6

2009 sample Scenario 3:

2.1

4.2

45.0

48.7

5

Dismissal (%) Rank

Scenario 1: Gifts

Supervisor 1995 sample

28.9

27.4

33.6

10.1

3

2009 sample Scenario 4: Police

33.5

22.0

39.9

4.6

2

DUI 1995 sample

24.1

33.2

39.0

3.7

2

2009 sample Scenario 5:

22.5

22.3

51.0

4.3

1

Kickback 1995 sample

8.4

18.3

52.7

20.6

4

2009 sample Scenario 6: Speed

10.5

10.5

51.0

28.1

4

1995 sample

2.5

10.9

61.4

25.2

5

2009 sample

3.4

3.7

38.2

54.8

6

Chi-square

Phi

216.07***

.307

.058

.016

37.31***

.128

41.54***

.135

38.11***

.129

224.47***

.313

Note: * p < .05; ** p < .01; *** p < .001

five out of six scenarios the mean values provided by the respondents from the 1995 sample were about the mid-point of the scale or even into the non-reporting side (Table 14.5). On the other hand, this was the case for only two scenarios for the 2009 respondents (Table 14.5). The only scenario in which the respondents in the 1995 sample seemed willing to report corruption describes a theft from a crime scene. At the same time, the willingness to report this theft was not statistically significantly higher in 2009 (Table 14.5), while the respondents in the 2009 sample were statistically significantly more likely to say that they would report all other five scenarios than were the respondents from the 1995 sample. The differences were particularly large, about 1 on a five-point scale in two scenarios (acceptance of gratuities; accepting a bribe) and, hence, of substantive importance (Klockars et al., 2006). Unlike their own expressed willingness to report, the respondents’ estimates of the others’ willingness to report suggested a more homogeneous picture over time (Table 14.5). Specifically, only three scenarios featured statistically significant differences between the two groups in the estimates of others’ willingness to report; in one of the scenarios (theft from a crime scene), the respondents in the 1995 sample were more likely to expect that others would report than the respondents in the 2019 sample were (Table 14.5). In the remaining two scenarios with statistically significant differences (acceptance of gratuities; accepting a bribe), the respondents in the 2009 sample were more likely to say that others would report this behavior than their colleagues in the 1995 sample were. The relative order of scenarios based on the mean values suggested that the respondents in the 1995 sample and the respondents in the 2009 sample expressed similar relative willingness to report (Spearman’s rho = .886, p < .05). The relative order of how likely other police

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3.96

3.52

4.13

4

5

3.14 Kickback Scenario 6: Speed 3.16

Note: * p < .05; ** p < .01; *** p < .001.

2.35

2

DUI Scenario 5:

Supervisor Scenario 4: Police

2.09

2.99

4.04

2.68

3

6

1

6

4

1

3

5

2

2009 sample Mean Rank

2.72

Scenario 3:

1.67

Scenario 2: Theft

Own willingness 1995 sample Mean Rank

Estimates of willingness to report

Scenario 1: Gifts

Table 14.5

-3.17**

-5.89***

-4.31***

-4.16***

-1.40

-17.49***

t-test

-.97

-.38

-.26

-.27

-.08

-1.01

Diff.

3.07

3.05

2.20

2.73

3.72

1.85

5

4

2

3

6

1

Others’ willingness 1995 sample Mean Rank

3.30

3.12

2.27

2.68

3.50

2.43

5

4

1

3

6

2

2009 sample Mean Rank

.05 -.07 -.08 -.23

-1.35 -1.24 -4.25***

.22

-.58

Diff.

.71

4.21***

-11.44***

t-test

Studying police integrity  197

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198  Handbook on corruption, ethics and integrity in public administration officers would be to report behavior is even more similar between the two groups of respondents (Spearman’s rho = .943, p < .01).

CONCLUSION This chapter illustrates how problems associated with the direct measurement of police corruption can be alleviated by focusing instead on the measurement of police integrity. We used the theory of police integrity and its related methodology (e.g., Klockars and Kutnjak Ivković, 2004; Klockars et al., 2000, 2004, 2006) to conduct an empirical study that sought to measure potential changes in Croatian police officers’ views on police corruption over time. The police officers surveyed in 1995 perceived corruption as somewhat less serious, thought that somewhat less severe discipline was appropriate, and were less likely to say that they would report than the respondents in the 2009 survey did. However, the results do not suggest large differences in the opinions toward police corruption; rather, most differences are moderate in size. The results of our study, conducted over a period of 14 years, also demonstrate that the changes in the society at large could be directly related to how police officers perceive corruption. Immediately after the war had ended, at the time of our first survey, Croatia commenced the transition process. However, the zeal for, and effectiveness of, dealing with corruption in society did not followed a clear path and, in fact, might have worsened around the time of the second survey in 2009. Although stories of government-related corruption circulated through the press during this period, they peaked two years after, in 2010, with the arrest of Ivo Sanader, a former leader of the Croatian Democratic Union and former prime minister. Our results also demonstrate that the respondents’ own views have changed more than their perceptions of police culture. In each and every measure of the respondents’ views about police corruption, the respondents in the 1995 sample typically expressed attitudes associated with lower integrity. However, when it came to their assessments of police culture and the actual discipline that the police agency would administer, the views expressed by the two groups of respondents tended to be more similar. Our findings align with the findings from the South African study (Kutnjak Ivković and Sauerman, 2012), which reported more extensive changes in the personal views than in the views about police culture. Although the views of their peers have changed over time—as evinced by the shift in their personal views about police corruption—the respondents used a somewhat outdated set of perceptions about how other police officers would react, which creates opportunities to deal with police culture. Police administrators could use the results of empirical studies to signal to their police officers that their peers may perceive police corruption more seriously than the police officers may have assumed, thereby imparting information that, hopefully, will help create a culture in which police corruption is less likely to be tolerated.

REFERENCES Code of Criminal Procedure (1997). Zagreb: Narodne novine 110/97. Code of Criminal Procedure (2008). Zagreb: Narodne novine 152/08. Fabrizio, L. E. (1990). The FBI National Academy: A study of the change in attitudes of those who attend. Chicago: University of Illinois Chicago’s Office of International Criminal Justice.

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Studying police integrity  199 Fitzgerald Commission (Commission of Inquiry into Possible Illegal Activities and Associated Police Misconduct) (1989). Report of a Commission of Inquiry Pursuant to Orders in Council. Brisbane. Kane, R. J. and M. D. White (2009). Bad Cops: A study of career-ending misconduct among New York City police officers. Criminology and Public Policy, 8(4): 737–69. Khechumyan, A. and S. Kutnjak Ivković (2015). Police Integrity in Armenia. In Kutnjak Ivković, S. and M. Haberfeld (Eds), Police Integrity across the World. New York: Springer, pp. 37–66. Klockars, C. B. and S. Kutnjak Ivković (2004). Measuring Police Integrity. In Hickman, M. J., Piquero, A. R., and Greene, J. R. (Eds), Police Integrity and Ethics. Belmont, CA: Wadsworth Publishing, pp. 1.3–1.20. Klockars, C. B., Kutnjak Ivković, S., and M. R. Haberfeld (Eds) (2004). The Contours of Police Integrity. Newbury Park, CA: SAGE. Klockars, C. B., Kutnjak Ivković, S., and M. R. Haberfeld (2005). Enhancing Police Integrity. Research for Practice. US Department of Justice, Office of Justice Programs, National Institute of Justice. Washington, DC: Government Printing Office. www​.ncjrs​.gov/​pdffiles1/​nij/​209269​.pdf, accessed 5 April 2020. Klockars, C. B., Kutnjak Ivković, S., and M. R. Haberfeld (2006). Enhancing Police Integrity. Dordrecht: Springer. Klockars, C. B., Kutnjak Ivković, S., Harver, W. E., and M. R. Haberfeld (1997). The Measurement of Police Integrity. Final Report Submitted to the US Department of Justice, Office of Justice Programs, National Institute of Justice. Klockars, C. B., Kutnjak Ivković, S., Harver, W. E., and M. R. Haberfeld (2000). The Measurement of Police Integrity. Research in Brief. US Department of Justice, Office of Justice Programs, National Institute of Justice. Washington, DC: Government Printing Office. Knapp Commission (Commission to Investigate Allegations of Police Corruption and the City’s Anti-Corruption Procedures) (1972). Report on Police Corruption. New York: G. Braziller. Knowles, J. J. (1996). The Ohio Police Behavior Study. Columbia, OH: Office of Criminal Justice Services. Kutnjak Ivković, S. (2000). Challenges of Policing Democracies: The Croatian experience. In Das, D. and Marenin, O. (Eds), Challenges of Policing Democracies: A world perspective. Newark, NJ: Gordon and Breach, pp. 45–85. Kutnjak Ivković, S. (2004). Distinct and Different: Transformation of the Croatian Police. In Caparini, M. and Marenin, O. (Eds), Transforming Police in Central and Eastern Europe. Muenster: Lit Verlag/ Somerset, NJ: Transaction Publishers, pp. 195–219. Kutnjak Ivković, S. (2003). To Serve and Collect: Measuring police corruption. Journal of Criminal Law and Criminology, 93(2–3): 593–649. Kutnjak Ivković, S. (2015a). Studying Police Integrity. In Kutnjak Ivković, S. and Haberfeld, M. (Eds), Police Integrity across the World. New York: Springer, pp. 1–36. Kutnjak Ivković, S. (2015b). Police Integrity in Croatia. In Kutnjak Ivković, S. and Haberfeld, M. (Eds), Police Integrity across the World. New York: Springer, pp. 97–124. Kutnjak Ivković, S. and M. R. Haberfeld (Eds) (2019). Exploring Police Integrity: Novel approaches to police integrity theory and methodology. New York; Springer. Kutnjak Ivković, S. and C. B. Klockars (1998). The Code of Silence and the Croatian Police. In Pagon, M. (Ed.), Policing in Central and Eastern Europe: Organizational, managerial, and human resource aspects. Ljubljana: College of Police and Security Studies, pp. 329–47. Kutnjak Ivkovich, S. and C. B. Klockars (2004). Police Integrity in Croatia. In Klockars, C. B., Kutnjak Ivkovich, S., and Haberfeld, M. R. (Eds), The Contours of Police Integrity. Thousand Oaks, CA: SAGE, pp. 56–74. Kutnjak Ivković, S. and A. Sauerman (2012). The Code of Silence: Revisiting South African police integrity. South African Crime Quarterly, 40(June): 15–24. Kutnjak Ivković, S., Cajner Mraović, I., and D. Sudar (2019). The Speed of Progress: Comparing citizen perceptions of police corruption in Croatia over time. In Kutnjak Ivkovich, S. and Haberfeld, M. (Eds), Exploring Police Integrity. New York: Springer, pp. 341–64. Kutnjak Ivkovich, S., Sauerman, A., Faull, A., Michael Meyer, M., and Newham, G. (Forthcoming). Police Integrity in South Africa. New York: Routledge.

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200  Handbook on corruption, ethics and integrity in public administration Martin, C. (1994). Illinois Municipal Officers’ Perceptions of Police Ethics. Chicago, IL: Illinois Criminal Justice Information Authority, Statistical Analysis Center. Mollen Commission (New York City Commission to Investigate Allegations of Police Corruption and the Anti-Corruption Procedures of the Police Department) (1994). Commission Report. New York. PBS (2012). Rampart Scandal Timeline. www​.pbs​.org/​wgbh/​pages/​frontline/​shows/​lapd/​scandal/​cron​ .html, accessed 5 April 2020. Police Law (2000). Zagreb, Croatia: Narodne novine 129/01. Police Law (2011). Zagreb, Croatia: Narodne novine 34/11. Roebuck, J. B. and Barker, T. (1974). A typology of police corruption. Social Problems, 21: 423–37. Transparency International (2011). Corruption Perceptions Index. www​ .transparency​ .org/​ policy​ _research/​surveys​_indices/​cpi, accessed 5 April 2020. UNODC (2011). Corruption in the Western Balkans: Bribery as experienced by the population. www​ .unodc​.org/​documents/​data​-and​-analysis/​statistics/​corruption/​Western​_balkans​_corruption​_report​ _2011​_web​.pdf, accessed 5 April 2020. Van Droogenbroeck, F., Spruyt, B., Kutnjak Ivković, S. and Haberfeld, M. (2019). The effects of ethics training on police integrity. In Kutnjak Ivkovich, S. and Haberfeld, M. (Eds), Exploring Police Integrity. New York: Springer, pp. 365–82. Wood Royal Commission (Royal Commission into the New South Wales Police Service) (1997). Final Report. Sydney: Government of the State of New South Wales.

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15. Prison corruption: an ecological framework Andrew Goldsmith

INTRODUCTION Prisons are complex entities that frequently fail on their own terms. They aim to meet a range of objectives (security, good order, rehabilitation, human treatment), however these aims are often difficult to achieve in practice and can contradict or undermine each other. The conditions of confinement mean that imprisonment inevitably imposes ‘pains’ of some kind on their populations that contribute to stressful conditions for both staff and prisoners. These conditions can set the scene for various kinds of corruption. Prisons also contain somewhat unique populations united by the fact that those populations have been convicted of relatively serious or very serious crimes, and often will have ongoing criminal associations in the outside world. In many cases prisoners enter prison with prior histories of conflict with police, schools, courts and other authorities, and troubled histories in terms of work, health and mental well-being, yet prisons choose not to or are unable to do much to assist them. These factors also enable prison corruption of various kinds. What occurs by way of corruption typically reflects intersections between individual, group, institutional and wider environmental conditions. The knotty problems of prison corruption will require responses often on more than one level. This chapter therefore proposes to adopt what will be called an ecological approach – the need to look at the myriad influences behind corrupt acts in terms of the ecology of prisons. This approach finds support in the work of Philip Zimbardo, the originator of the famous Stanford Prison Experiment in the early 1970s. Zimbardo declared many years later that the most important lesson to be drawn from that experiment (as well as from many years of subsequent study and analysis) was that ‘Situations are created by Systems’ (Zimbardo 2007: 226). His concept of system refers to the ‘institutional support, authority and resources that allow Situations to operate as they do’. Systems, according to Zimbardo, operate in ways to validate actions ‘that would ordinarily be constrained by pre-existing laws, norms, morals and ethics’ (2007: 226). Systems, he notes, have ideologies. An ideology is a ‘slogan or proposition that usually legitimates whatever means are necessary to attain an ultimate goal’ (226). In terms of applying this perspective to prison corruption today, we need to locate and account for the influence of these ideologies in terms of how they legitimate or justify deviations from legal and administrative commitments to rehabilitation and humane containment inside prisons. We also need to look at those factors that shape particular situations of corrupt action. Punishing the corrupt prison officer for bringing illicit drugs into prison to sell to prisoners by itself does not explain why the demand for those drugs exists, or what factors around that situation may encourage prison officers to act in this way. For Zimbardo, the system is not just the immediate institutional environment, in the present case the prison (physical conditions, management arrangements, staffing levels, training, etc). It also includes the wider sources of resources, authority and ideology that enable and promote deviations from laws, norms and ethics. An overwhelming focus on preventing escapes and limiting violence inside prisons can displace attention from the other ends of imprisonment and unleash a range of practices 201 Andrew Goldsmith - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:52PM via The University of British Columbia Library

202  Handbook on corruption, ethics and integrity in public administration deviating from law and morality. His reflections on the system at Abu Ghraib military prison in Iraq are consistent with, and support, his general argument. The chapter is organised into four sections. The next section draws on some recent examples to make the case for a multi-level systemic approach to understanding prison corruption. It points to links between characteristics of particular settings (e.g. architecture, facilities, personnel working there, programmes) and wider influences (group, structural, political, economic) and to the often unforeseen or unintended consequences locally of more general policies and practices. This approach, we suggest, reflects an ecological model. The third section then looks at several principal areas of prison corruption (inappropriate relationships, contraband and inappropriate access and use of prisoner information). In light of the analysis of their causes, I shall propose measures that go beyond responding to instances and that also seek to remedy systemic issues. In the final section, I shall examine some areas in which correctional integrity can be further developed and implemented as a key orienting principle for prison operations.

THE COMPLEX ECOLOGIES OF PRISONS: SOME EXAMPLES The following passage is from a recent report by the United Kingdom’s (UK) chief inspector of prisons into conditions in Bedford Prison, a prison in the south of England. The conclusions on the prison environment at Bedford are disturbing. Though the term corruption is not directly employed, it is implicit at least in many of the issues raised, and therefore linked to wider systemic problems. The prison was fundamentally unsafe. Violence of all kinds had risen alarmingly since the last inspection a mere two years ago. In the same period there had been five self-inflicted deaths and levels of self-harm had risen. The violence was largely fuelled by drugs, and the prisoners – many of them living in fear – were confined for unacceptable lengths of time in cells that were all too often infested with vermin, dirty and unfit to be occupied. Many staff were doing their best in difficult circumstances, but inspectors witnessed a dangerous lack of control and excessive tolerance of poor behaviour. Meanwhile, few prisoners attended work or education and there was little encouragement to do so by staff. Many prisoners milled about aimlessly on wings with nothing to do. In short, the prison lacked a culture of work or learning. (Report on an unannounced inspection of HMP Bedford by HM Chief Inspector of Prisons 28 August–6 September 2018: 5)

Several points arise from this passage. The first is that corruption is not directly mentioned. Yet references to drug-related violence and its impact on prisoner safety and access to services point directly to the operation of drug markets inside many prisons. This link should cause us to ask how such prohibited practices are possible. Prison officers are described as operating in ‘difficult circumstances’ of squalor and vermin infestation. The demand for drugs in such a setting should hardly be surprising, with fear, menace and pointless time-serving pervading day-to-day life of staff and prisoners. Nor is it surprising to find that prison officers and other staff are corruptly engaged in facilitating these prohibited activities. How is it then, we should ask, that the ‘system’ permits or tolerates these conditions and related corrupt practices to persist? Some similar reflections on the connections between prison corruption and the wider environment emerge from the following passage, again by the chief inspector of prisons, into

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Prison corruption  203 life inside Feltham Young Offenders Institution, a ‘prison’ for young persons in the Greater London region: As HM Inspectorate of Prisons has reported in the past, the overriding issue behind the extraordinary decline in performance over the past 18 months is the approach to dealing with violence and managing the behaviour of children. Of course, there is a need to keep children safe from each other, and for staff themselves to be safe in their workplace. However, the response at Feltham A, for many years, has been to focus too heavily on containing the problems rather than addressing them. As a result, ‘keep apart’ policies – developed so that children from rival gangs, or who for other reasons are likely to be violent to each other, are kept separate – have come to dominate. This has led to a collapse of any reasonable regime, prevented many children from getting to education or training, delayed their access to health care, isolated them from meaningful human interaction and frustrated them to the point where violence and self-harm have become the means to express themselves or gain attention. There clearly needs to be a new approach which looks fundamentally to change behaviour and goes beyond merely trying to contain violence through ever more restrictive security and separation. (Urgent Notification: HMYOI Feltham A, HMIP, 22 July 2019)

Behind the appalling conditions described is a fundamental concern – the young people inside are not getting the kinds of positive programmes and opportunities that they need for successful release and integration back into the community. The emergence of gangs, often linked to control of illicit markets inside prisons, is a wider phenomenon that goes to the prison climate and threatens what can be called correctional integrity – the realisation of the proper aims of the prison system (Goldsmith et al. 2016). While some components of the ecology of corruption are internal to the prison or prison system, others are undoubtedly linked to factors outside prison. Problems in the wider community, including drug and other forms of addiction, are represented inside prisons, often in more acute form due to the paucity of treatment options and the higher prices for illicit goods generated by the prohibition regime. An ecological approach to understanding prison corruption, and the factors that undermine correctional integrity, requires consideration of particular examples of corruption from potentially four different levels: (1) individual (personal, demographic features that influence behaviour); (2) the micro-system (the power relations and the interactions between prisoners, and staff and prisoners, in the prison); (3) the meso-system (the characteristics, policies and practices of the prison, as well as the inmate culture); (4) the macro-system (‘the social attitudes, perceptions and cultural beliefs of a society… may also include laws and customs’) (Ahlin 2019: 165). The ‘System’ referred to by Zimbardo fits within this model, referring to factors particularly in levels 3 and 4. The model also rejects the idea that prison corruption is mainly or principally a matter of ‘bad apples’ and therefore of detecting and removing them. Instead, we must look to the system that is the ‘barrel’ and indeed the ‘orchard’ in order to explain why ‘apples’ (individuals) go bad (Punch 2003; Anechiarico and Jacobs 1996). This multi-level framework is also convenient in that it allows the use of a range of criminological theories that vary from structural (or background) factors such as race and economic inequality, to mid-level theories of group and media influence, to situational and individual theories that focus on interactions and features of immediate environments.

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204  Handbook on corruption, ethics and integrity in public administration

MAJOR FORMS OF PRISON CORRUPTION In 2015, a 51-year-old grandmother, Joyce Mitchell, assisted two convicted murderers to escape from the Clinton Correctional Facility in New York. She did this while working on staff at the prison. Prior to assisting the escape, she had progressed from bringing in cookies for certain prisoners to conducting a sexual relationship with one of the prisoners in the prison tailor shop where she was the superintendent. In preparation for the escape, she had smuggled items into the prison such as hacksaw blades to be used in the escape. Mitchell was also found guilty of conspiring with one of the escapees to murder her husband (Worley et al. 2018). A couple of years earlier, a leader of a prominent prison gang, Tavon White, was operating his drug-trafficking business from inside the Baltimore City Detention Center. In addition to having up to 13 prison officers involved in smuggling contraband on his behalf into the prison, he also had found the time and opportunity while imprisoned to father five children by four different prison officers (Worley et al. 2018). What we see here are several things. One is the blurring of prison corruption and organised crime. Despite being in prison, some individuals can be involved in both activities, typically which are linked to each other in some way. Another is the reversal of power relationships presumed to operate between officers and prisoners. In both these cases, prisoners had managed to exercise power over the decisions of prison officers, with a variety of (mostly dire) consequences. Also, what is evident is both a progression from relatively minor acts of corruption to more serious forms (a ‘slippery slope’) and the co-incidence of different corruption types; conducting a sexual relationship can lead to more serious breaches of security or accompany other breaches at the same time (e.g. smuggling in contraband for a prisoner with whom one is conducting a relationship). The varieties of prison corruption are numerous and too difficult to address here in such a finite space (see Goldsmith et al. 2016 for a wider review). For this reason, only three major forms of prison corruption will be focused upon – inappropriate relationships, trafficking of contraband and misuse of prisoner information. One reason to include inappropriate relationships is that these relationships can be associated with a range of different corrupt practices. This includes trafficking of contraband, as we will see, when prison officers form relationships inside as well as outside prison to facilitate this traffic. Misuse of information can take different forms, and be motivated for different reasons, as will be discussed. However, it is included here because of the significance for prisoner well-being associated with the use and abuse of this information. Information on prisoners can be falsified or leaked, affecting prospects within the system as well as damaging their personal privacy.

INAPPROPRIATE RELATIONSHIPS The nature and quality of relationships between prison staff and prisoners fundamentally affect the prison climate and how prisons are run. As the Tavon White case shows, the type of relationships White established with a large number of prison staff had a detrimental effect on the prison regime. A difficult line must be drawn for those working in prison between dealing in a respectful and concerned manner with prisoners, and getting too close, exposing staff to the risk of manipulation and exploitation. Prison rules invariably impose strict limits on such things as exchanging gifts or favours, formation of relationships with prisoners and excessive

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Prison corruption  205 fraternising on the grounds that professional distance is important to the good order of prisons. The avoidance of perceptions of favouritism is one ground for such rules. Another is the erosion of disciplinary capability of an officer compromised by such a relationship. By not getting the right balance, the ability to practise dynamic security, the principle that prison safety and security depends on good relationships in which staff and prisoners interact with respect and staff provide fair treatment of prisoners (UNODC 2017), is compromised. Breaches of prison and professional rules of these kinds are sometimes called boundary violations. According to one former correctional officer and prominent researcher in the field: Inappropriate relationships between inmates and staff occur much more frequently than outsiders would care to believe, and in male facilities, they are often initiated by offenders. These actors, or ‘ballbusters’ to use Sykes’ (1958) terminology, can be extremely persistent and will often go to great lengths to compromise correctional employees and disrupt the security of prison facilities (Worley 2016: 1224).

Perhaps the most prominent and familiar kind of inappropriate relationship in prison settings is the sexual/romantic relationship between prison staff member and prisoner. These often attract considerable media attention (e.g. Grierson 2019; Sky News 2018). What makes these relationships inappropriate is not simply the fact that a rule against such relationships has usually been contravened. It is rather the fact that a position of trust and responsibility has been compromised, either by the officer ‘taking advantage’ of the vulnerability of the prisoner (reflecting an exploitation of a power imbalance between the two), or conversely when a prisoner has successfully groomed an officer in order to obtain some kind of improper and/ or prohibited benefit inside the prison system. It should be noted, however, that inappropriate relationships can also manifest non-sexually in the form of favouritism and nepotistic arrangements from which some prisoners benefit unfairly over other prisoners. Inherent in the notion of inappropriateness is the idea of boundary violation, the idea that work-related roles should not become blurred by sentimental or other personal considerations, even if they are well intentioned. These violations can occur between general prison duty officers and prisoners as well as between specialist staff (nurses, teachers, etc.). In both cases, the conduct of such relationships is normally in breach of occupational and/or professional codes, as well as contrary to the rules of the institution. Inappropriateness can also occur in exogenous relationships, those conducted with persons outside the prison. These could be relatives, friends, associates or acquaintances of prisoners. Often these relationships are conducted through prison visits, letters and telephone conversations. From a prison corruption point of view, they are significant in two main senses. The first is when these relationships relate in some way to the operation of illegal or prohibited activities inside the prison (e.g. supply of drugs and contraband). The second sense, which can be related to the first, is when prison staff become the vectors for communication between prisoners and those outside the prison. In some cases, such relationships are planned from the beginning, when an applicant for employment in prison has pre-existing relationships or associations with persons inside prison (particularly, prisoners) or it can emerge later, when a prison officer decides to assist persons outside and/or inside on the basis of relationships formed with persons outside the prison. This category is sometimes referred to as insider threats when there is a clear intent to exploit a workplace position for criminal or other improper purposes (Goldsmith et al. 2016: 38). The United Kingdom Anti-Corruption Strategy 2017–2022 (HMG 2017) identified insider threats in prisons as one key area of critical vulnerability due to its

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206  Handbook on corruption, ethics and integrity in public administration links to the furtherance of organised crime (as well as to realising the usual objectives of the prison system) (HMG 2017: 31–2). These relationships are risk-prone to exploitation when the staff member actively engages in activities (e.g. taking messages in or out, bringing in contraband) that are illegal or prohibited. The reasons why officers become engaged in these relationships can vary. At some level it can be attributed to human nature; proximity of staff and prisoners under conditions of varying intimacy and covertness link opportunity and temptation. The growing incidence of women officers in male prisons certainly provides greater opportunity for heterosexual couplings than was the case in the past. The conduct of improper relationships in prison requires one or more of the following circumstances: places where scrutiny by others can be avoided for periods of time, and the connivance or indifference of other officers and/or prisoners. Physical conditions therefore can be analysed for risks in this respect, and devices such as CCTV cameras and other forms of structured surveillance can be used to reduce opportunities (see Wortley 2002). It is difficult to deny also that some officers may succumb by reason of a combination of personal circumstances and social isolation. Officers vulnerable to grooming for romantic or sexual ends have been observed in many instances to be less well integrated peer-wise with other officers, and to generally feel undervalued or mistreated in the workplace (Worley and Worley 2011). In a recent case from Western Australia, a prison officer was groomed by prisoners when they noticed that other officers would have little to do with that officer. The officer in question had moved to Perth from New Zealand and had no family or friends in Perth, so he was socially isolated. He agreed to bring in drugs and other contraband based upon the relationships he established with certain prisoners and their drug-supplying associates on the outside (Western Australia 2018). The theme of organizational injustice, the feeling held by employees that they are ignored, undervalued or mistreated in the workplace, is a theme linked in some studies to the prevalence of officer misconduct (Boateng and Hsieh 2019). By way of response, this line of analysis points to the need for prison managers to pay more attention to questions of effective supervision and to ensure fair treatment of employees in the workplace. However, not all cases of inappropriate relationship reflect poor peer integration or reliance on an absence of oversight. There are accounts of these relationships on occasion being actively supported by other officers, or of other officers ‘turning a blind eye’ to such things (Goldsmith et al. 2016). The question of why officers fail to report breaches of prison rules by other officers is something addressed later in this chapter.

TRAFFICKING AND CONTRABAND A recent headline from the UK’s Independent newspaper read ‘Hundreds of prison officers sacked for smuggling contraband into jail, new figures reveal’ (Forrest 2018). While pointing to a disturbing level of failure by prison officers to follow the rules governing prison life, such corrupt practices, as noted earlier, help foster and sustain the illicit prison markets for these goods. The negative impacts from such compromises on officer control and authority inside the prison are well established: [T]he illegal system of goods and services definitely produces a situation where the corruption of authority among officers is inevitable. Since officers are evaluated on how well they control their

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Prison corruption  207 respective areas and the inmate leader’s power is founded in the ability to facilitate contraband flow, there is a necessary linkage between the two to promote long-term prison stability. Thus, the prison organisation is forced to trade off some corruption for ‘order’. (Kalinich and Stojkovik 1987: 16–17)

While trading inside prison may be functional for some prisoners, there are many ‘dangers of active involvement in the underground economy of prison life’, of which illicit drugs and mobile phones are an integral part. As Copes et al. found, ‘When inmates engage in trading of goods, services or other valued commodities, there is a likelihood not only of suffering from inequitable exchanges, but also of finding oneself in a position of indebtedness or of being perceived as a deserving or vulnerable target for violent reprisals, robberies or attacks’ (Copes et al. 2010: 13–14). As in the case of illicit drug markets outside prison, those inside who control access to drugs are able to manipulate demand among prisoners. One means is by providing newly admitted prisoners with drugs on credit. By creating a debt in this way, prison drug dealers are then able to exploit the indebted prisoner and his or her relatives through threats of punishment or sexual assault (see Goldsmith et al. 2016: 69). The ongoing trade in contraband of various kinds (cash, phones, SIM cards, drugs, etc.) indicates strong demand from within the prison population for these items and the limited effectiveness of current physical screening measures and supervisory practices in restricting this illicit trade. Several explanations for this corrupt practice are relevant. Policies that prohibit high-demand goods such as psychoactive drugs are certainly part of the wider system that we must have regard to in explaining the persistence of such activities. As policies towards ‘softer’ drugs become more liberalised in the outside communities, there may in fact be greater demand in future for such drugs inside prisons. Ongoing policies prohibiting access will inevitably fuel the illicit market for such items inside prisons. They will also ensure that prices for items inside prison are much higher than on the outside, and that the market forces inside the prison to exploit this price discrepancy will be strong if not severe. There is also, relatedly, the fact that many prisoners enter prison with acquired habits or dependencies of drugs and/or alcohol that often go untreated during their time in prison. Failure to accord humane treatment to such persons during their incarceration, thus affecting their post-release probabilities of successful rehabilitation and reintegration, means that the demand side is left unaddressed. Such program failures also leave open the possibility that some prisoners will become exposed to addictive drugs inside prison for the first time and will leave prison with acquired habits or addictions. Explanations also must be found in terms of individual vulnerabilities, micro-system failures (officer cultures of indifference or support, supervisory deficiencies) and situational factors. Taking first the issue of officer vulnerability, as we saw in our discussion of inappropriate relationships, some officers are susceptible to grooming by prisoners. Grooming by prisoners is usually motivated by ulterior objectives, such as getting the officer to bring in contraband. Sometimes officers are groomed by associates of prisoners through contact with them in outside activities. In the Western Australian case mentioned earlier, the prison officers concerned had attended a gym that was also attended by ex-prisoners and members of outlaw motorcycle gangs who were able to supply drugs and provide introductions to prisoners in the prison where the officers worked (Western Australia 2018). In the case of one of these officers, as previously stated, he had also been targeted by prisoners for grooming because it had been noted that the officer was not well accepted by his fellow officers. Officers implicated in such

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208  Handbook on corruption, ethics and integrity in public administration activities often have high-risk markers such as financial problems (often gambling related), marital breakdown and pre-existing drug histories for drugs such as steroids. Another factor supporting this form of corruption is the unique opportunity prison officers possess through their jobs to facilitate the trafficking of contraband. They come and go regularly from prisons because it is where they are employed. They also do so with much greater frequency than visitors or contractors working in the prisons, who are other known carriers of contraband. So, opportunities to act corruptly in this way are part of prison officers’ ‘routine activities’. As noted, these opportunities can often be highly financially rewarding. Officers may be paid hundreds or even thousands of dollars to bring in to prison a single package of contraband. Given this structural vulnerability, it is important to examine the systems in place to monitor officer behaviour including the measures used to screen officers at the points of entry and exit from prisons. These consist of systems relating to the recruitment, training and supervision of officers on the job, as well as the ‘hard’ security measures for preventing and detecting the inflow of illicit goods and items (see Wortley 2002). A related informal element at this level is the officer subculture, and how it ignores or even supports some forms of corruption. More will be said about the contribution of this element in the next section on misuse of prisoner information. Another lens to consider prison officer involvement in contraband, and indeed other forms of prison corruption, is that of moral desert and deservingness. As Zimbardo’s work shows, efforts to dehumanize prisoners or to see them as less deserving of care or respect sets the scene for excusing or justifying actions harmful to the welfare of prisoners. If prisoners attack each other because of disputes over drugs, for example, it might be overlooked on the basis that prisoners ‘deserve’ to be mistreated in prison. Feelings of organisational injustice on the part of officers, paradoxically, can alternately contribute to feelings of greater solidarity with prisoners than with the system, leading to inappropriate relationships and other forms of corruption. Corruption can potentially arise therefore from officer contempt or sympathy. A kind of negative distancing from prisoners, however, is often the precursor to forms of abuse and corruption. Scott (2008) drew upon Sykes and Matza’s techniques of neutralisation to explain the ‘ghosting’ of prisoners by prison officers. This occurs when the experiences and needs of prisoners are disregarded. The five neutralisations he found officers using were denial of responsibility (prisoners deserve what prisons inflict because of their own shortcomings); denial of injury (prisons offer better conditions than most prisoners have had in the outside world); denial of victim (‘they don’t know any different’); condemning the condemners (those critics of prison conditions are naïve do-gooders); and appeal to higher loyalties (the real victims are those abused by the prisoners when they committed their crimes). These moral justifications more clearly relate to officer treatment that is harmful or neglectful; ‘turning a blind eye’ to prisoners’ illicit activities in prison as noted may stem from a cynical view or from a more positive sense of complicity.

INAPPROPRIATE DEALING WITH PRISONER INFORMATION One sphere where officers can exercise influence over prisoners with less direct risk of exposure or compromise of their authority is that of personal information regarding prisoners held by the system. The levers are less visible, and potentially therefore harder to monitor and to hold officers accountable for: ‘They don’t beat us anymore – they don’t have to. They can win

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Prison corruption  209 by using bits of paper. It’s all a mind game now’ (prisoner quoted in McDermott and King 1988: 373). In an increasingly data-centric world, control over information invests the holders of information with enormous power. The information held by prison systems relating to prisoners (their background details, convictions, records of time spent in prison, etc.) is of inordinate importance to prisoners. Ensuring confidentiality around personal information is often important in reassuring prisoners that they will not be discriminated against or targeted for some aspect of their past that they would prefer to keep discreetly hidden. It is also the case that what is ‘put in the record’ regarding their time in the system can have a range of important consequences for classification decisions (regarding where and under what conditions they serve their sentence), access to privileges during their sentence and decisions regarding the granting of early release and parole. A particularly concerning abuse in this regard is the filing of false reports carrying a negative connotation for the prisoner concerned. To give a recent New South Wales case as an example, a prisoner was the subject of false intelligence reports stating that an illegal drug had been found in his cell. What compounded the degree of corruption in this instance is that the prisoner had been the victim of assault by officers, and this false report was filed in an effort to cover up a case of excessive force (New South Wales 2019). Another area of risk related to the holding of information relating to prisoners is the value sometimes attached to personal prisoner information by the media. The demand for information from certain mainstream media outlets has been implicated in several high-profile cases in the UK. English prison officer Scott Chapman was reportedly paid in the vicinity of £40,000 for information relating to the prison conditions in which convicted child killer Jon Venables was being kept (Goldsmith et al. 2016: 108). Prisoner-related information may also be of value to organised crime interests, seeking to locate a particular prisoner or his or her relatives, again creating a market for information of this kind that puts prisoners’ interests at risk. In other instances, the interest in prisoner information reflects voyeuristic interest among prison officers themselves, sometimes disclosing information to relatives and friends. Other instances of disclosure have arisen from carelessness, such as leaving a file on a desk or a computer monitor open for others to see. Overall, the unauthorised release of personal information to outside parties has been noted in several reports in Western countries to occur with disturbing frequency (Goldsmith et al. 2016: 106). Inappropriate dealing also occurs when officers engage in the filing of false or misleading records. A self-reported study of Queensland prison staff found that one in eight officers surveyed thought false reporting on prisoners happened ‘sometimes’ or even more frequently (Crime and Misconduct Commission 2009: 20). Understanding why officers might be disposed to make false reports needs to take account of the power relations at the interpersonal and institutional level, and of the feelings of officers towards their working conditions and environments. Feelings of organisational injustice have been linked to higher incidences of officer misconduct (Boateng and Hsieh 2019), but this finding is not associated specifically with abuses of prisoner information. Some studies of officer attitudes towards prisoner information suggest a level of casualness to this material, including a willingness to share it with others for voyeuristic reasons. These studies also point to difficulties many officers have in recognising that such sharing is inappropriate, and of their limitations more generally in terms of their ability to recognise and manage conflicts of interest in the workplace (Goldsmith et al. 2016: 108). The casual indifference evident in so many cases of officer disclosure of prisoner information is consistent with tendencies noted earlier for officers to neutralise the wrongness

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210  Handbook on corruption, ethics and integrity in public administration of their actions against prisoners, discussed above. The growing popularity of social media among those working in police and prisons is also a proven risk factor in terms of inappropriate disclosure, providing the potent combination of opportunity, means and the absence of effective oversight (Goldsmith 2015).

RESPONDING TO PRISON CORRUPTION An ecological approach to understanding prison-based corruption necessitates a response that is attentive to the range of factors that contribute to the harms and impacts from corruption. Much more needs to be done at the individual and institutional levels. At the individual level, there is a need to identify vulnerabilities through addiction, age, ethnicity and other personal factors that lead to involvement in corruption as victims or perpetrators. At the institutional level, the impact of illicit drugs and prison gangs on prison life includes forms of corruption of relationships between officers and prisoners, as well as between prisoners. The pressures on staff working especially in large prisons, prisons with very diverse populations and prisons with high percentages of serious offenders in the population are particularly at risk for interpersonal violence and exploitation. Such conditions arguably make it hard for officers to treat prisoners respectfully. Some studies have identified a link not only between prison size and risk of violence but also between histories of drug use and victimisation in prison (Teasdale et al. 2016). Interestingly, by contrast, having convictions for drug trafficking appears to be a protective factor against violent victimisation in prison (Teasdale et al. 2016). These findings confirm the significance of ongoing illicit drug markets in prison in terms of negatively impacting on the objectives of humane containment and providing opportunities for rehabilitation. Stepping back from this picture, we see matters such as prison size and the ongoing harms from illicit markets as making a material contribution to prison conditions and to diminishing correctional integrity. Larger prisons tend to be more violent and more corrupt. Heterogeneous prison populations also provide more fertile ground for various forms of disorder and abuse. How able prison systems feel to respond to corruption is linked to budgetary circumstances and pressures to accommodate more prisoners at the expense of other measures geared to correctional integrity and prisoner well-being (see Western Australia 2018: 36). These factors cannot be separated from wider public and political considerations of prison budgets and the priorities within prison-related policies. Other factors, such as deficiencies in drug-rehabilitation facilities inside prison, and the failure to provide meaningful activities, contribute to setting the scene for greater scope for illicit activities inside prison and the exploitation of more vulnerable prisoners. More research can assist us to better understand these associations and to devise policies that address the risks and harms effectively. These inevitably require higher-level policy resetting and commitment. As an example, the association between prison size and risk of violent victimisation may be explicable in terms of larger prisons having more spaces where victimisation can occur due to reduced natural surveillance. Alternatively, higher victimisation may arise in such settings due to the greater social distance that develops between officers and prisoners in such large-scale impersonal settings (Caravaca-Sanchez et al. 2019). Both scenarios call into question the configuration of current prisons and point to the need for greater focus on the detrimental effects of current configurations. More can also be done in conventional terms to reduce the incidence of and harms from prison corruption. While a broader focus on correctional integrity is important in tackling

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Prison corruption  211 issues preventively and systematically (Goldsmith et al. 2016), the detection and punishment of serious transgressions remains essential to disrupting corrupt practices and deterring others from engaging in them. While it is important therefore not to view the ‘anti-corruption’ approach in isolation from other measures (Anechiarico and Jacobs 1996), this approach needs to be effective in what it does. Technology has a contributing role to play in terms of situational prevention of corruption within prisons (Wortley 2002; UNODC 2017). In the case of mobile phones, tools such as Managed Access Systems can be deployed, whereby mobile phone towers are installed within the prison that prevent mobile phones in the vicinity from connecting with other telecommunication providers. Only phones registered and approved by the prison management can operate in those vicinities (see Grommon 2018). One area of vulnerability in terms of ongoing corruption is the difficulty the system has in detecting and acting on instances of corruption. The passivity of prison officers is a major contributor to this situation. Prison officers are not particularly good, or indeed inclined, it seems, at reporting the corrupt acts and misconduct of fellow officers. Though subject very often to obligations to disclose matters such as illicit drug use or fraternising with ex-prisoners, there are many instances where this has not occurred. In some cases, the officers in a position to report have been compromised by also engaging in the same or similar activity (e.g. taking steroids) (see New South Wales 2013). Measures are needed to encourage those who witness or experience them directly to report them to anti-corruption mechanisms, whether located within the organisation or outside. The trend towards external anti-corruption bodies in Western countries in recent decades in part reflects the desire to build institutions that individuals can come to in, and with, confidence to report acts of corruption. Without willingness among staff or indeed prisoners to report instances of suspected or actual corruption, often little can be done by way of formal action. Change requires active, not passive, bystanders. Explaining staff reticence to turn in a colleague (Goldsmith et al. 2016: 132–3; Wortley 2015: 211) requires consideration of a range of workplace factors as well as consideration of management and leadership influences. Given the natural advantage officers have to observe wrongful behaviours in prison, it is imperative that more be done to encourage staff to step forward to blow the whistle when needed. Getting staff to overcome feelings of disloyalty towards other officers, and to have confidence that their reports will be confidentially dealt with and acted upon sensitively and effectively, is no mean feat that can be mitigated to some degree through training and appropriate peer and mentor support. The history of whistleblowing, however, is generally a dismal one, showing a pattern of suffering by whistleblowers for their actions (e.g. Alford 2001; Miethe 1999). Prison management has a major responsibility here. These schemes need to be seen to work in practice. Support for whistleblower schemes is not enough, and many recent changes in this area have proven insufficient (Smith 2014). The proof of the pudding, as the saying goes, is in the eating. Few prison officers, it seems, are choosing to eat the pudding. As just one example, in the UK, a recent report from the Prison and Probation Service referred to current whistleblower arrangements for prison staff. In the 12 month reporting period, just two cases had been reported to the nominated officials for receiving reports. In both cases, the matters were ‘resolved with no case to answer’ (Her Majesty’s Prison and Probation Service 2019: 92). For a prison service that employs around 22,300 staff across 117 institutions holding in excess of 80,000 prisoners at any one time (Portal 2019; World Prison Brief 2019), these figures at face value are disturbingly low. It is possible that local, more informal schemes are working well, but we have little confirmation that this is the case. The accounts provided earlier in this

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212  Handbook on corruption, ethics and integrity in public administration chapter from the inspectorate of prisons, as well as the 2018–19 annual report (Her Majesty’s Inspectorate of Prisons 2019), point to a far more challenging and corrupted environment inside many prisons than the negligible number of reports from prison officers would indicate (see also Portal 2019). Building a more corruption-resistant culture among the staff will require attention to a variety of conditions inside prison and relating to employment. Employees confident in their role and not fearful of repercussions from other staff, management or prisoners are best placed to play an effective role in reporting corruption. The evidence of organised crime operating within many modern prisons is a reminder that how we view prison corruption and devise responses to it necessitates looking at the wider settings upon which illicit prison markets depend, and looking at ways of protecting witnesses to enable them to come forward to assist in investigations, whether they happen to reside inside or outside the prison.

CONCLUSION An ecological approach to prison corruption fits well with the ‘healthy prisons’ perspective used to frame the inspection assessments in prisons in England and Wales. This framework focuses on safety, respectful treatment, purposeful activity and access to programming (Her Majesty’s Inspectorate of Prisons 2019). Failure to meet standards in these areas in no small measure is linked to the pervasiveness of forms of corruption and violence linked to illicit drug markets in prisons. The short termism often seen in system responses to corruption overlooks or neglects the fact that virtually all current prisoners will return to the outside world at the end of their sentence. If we ignore the wider aims of the system, they will do so with an enhanced or steady likelihood of returning to crime. Reducing prison corruption inevitably requires looking beyond the savings from short-term austerity cuts to the unmeasured costs and longer-term losses from such a myopic view. Any changes must reflect the implications of the system. Piecemeal anti-corruption measures alone will not be enough. While better vetting of officer recruits, and more targeted training around grooming risks, for example, are likely to be useful, more is required. We must recall that the system consists of supervisors and managers as well as frontline officers and prisoners. Setting the ‘tone at the top’ in terms of principled commitment to the full suite of prison objectives is critical in terms of establishing the right ethical climate inside prisons (Goldsmith et al. 2016: 133–4). The governing legislation needs to make these objectives clear, and follow-up mechanisms such as an inspectorate with responsibility for administering ‘healthy prison’ assessments to ensure that standards of humane containment and provision of rehabilitation opportunities are monitored and accountability for deficient performance in these areas can take place. Another line for exploration is the use of prison officer peer committees that would meet to discuss a variety of accountability and working conditions issues; one potential gain from this practice, it has been suggested, is the encouragement of collective efficacy among staff that can assist in resisting such things as prisoner grooming of officers and social isolation of vulnerable officers (Worley et al. 2018: 342). Lastly, the integrity of prison establishments depends not only on prisons and prison staff not doing the wrong thing, but also on them doing the right thing. ‘Doing the right thing’ depends upon all levels of the prison system working together according to the same objectives.

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Prison corruption  213

REFERENCES Ahlin, E. (2019) ‘Moving beyond prison rape: Assessing sexual victimization among youth in custody’, Aggression and Violent Behavior, 47: 160–8. Alford, F. (2001) Whistleblowers: Broken Lives and Organizational Power. New York: Cornell University Press. Anechiarico, F. and Jacobs, J. (1996) The Pursuit of Absolute Integrity. Chicago, IL: University of Chicago Press. Boateng, F. and Hsieh, M. (2019) ‘Misconduct within the “four walls”: Does organizational justice matter in explaining prison officers’ misconduct and job stress?’ International Journal of Offender Therapy and Comparative Criminology, 63(2): 289–308. Caravaca-Sanchez, F., Wolff, N. and Teasdale, B. (2019) ‘Exploring associations between interpersonal violence and prison size in Spanish prisons’, Crime and Delinquency, 65(14): 2019–43. Copes, H., Higgins, G., Tewksbury, R. and Dabney, D. (2010) ‘Participation in the prison economy and likelihood of physical victimization’, Victims and Offenders, 6(1): 1–18. Crime and Misconduct Commission (2009) Perceptions of Misconduct in Queensland Correctional Institutions: A Survey of Custodial Officers. Brisbane: CMC. Forrest, A. (2018) ‘Hundreds of prison officers sacked for smuggling contraband into jail, new figures reveal’, Independent, 2 September. Goldsmith, A. (2015) ‘Disgracebook policing: Social media and the rise of police indiscretion’, Policing and Society, 25(3): 249–67. Goldsmith, A., Halsey, M. and Groves, A. (2016) Tackling Correctional Corruption: An Integrity Promoting Approach. New York: Palgrave. Grierson, E. (2019) ‘Prison officer sacked and jailed for having sex with inmate in cell’, Guardian, 30 April. Grommon, E. (2018) ‘Managed access technology to combat contraband cell phones in prison: Findings from a process evaluation’, Evaluation and Program Planning, 66: 39–47. Her Majesty’s Government (HMG) (2017) United Kingdom Anti-Corruption Strategy 2017–2022. London: Her Majesty’s Stationery Office. Her Majesty’s Inspectorate of Prisons (2019) Annual Report 2018–19. London: Her Majesty’s Stationery Office. Her Majesty’s Prison and Probation Service (2019) Annual Report and Accounts 2018–2019. London: Her Majesty’s Stationery Office. Kalinich, D. and Stojkovik, S. (1987) ‘Prison contraband system: Implications for prison management’, Journal of Crime and Justice, 10(1): 1–21. McDermott, K. and King, R. (1988) ‘Mind games: Where the action is in prisons’, British Journal of Criminology, 28(3): 357–75. Miethe, T. (1999) Whistleblowing at Work: Tough Choices in Exposing Fraud, Waste, and Abuse on the Job. Boulder, CO: Westview Press. New South Wales (2013) Investigation into the Possession and Supply of Steroids and Other Matters Involving a Corrective Services Officer NSW Corrections Officer. Independent Commission Against Corruption. New South Wales (2019) Investigation into the Conduct of NSW Corrective Services Officers at Lithgow Correctional Centre. Independent Commission Against Corruption. Portal, G. (2019) ‘How dangerous are prisons in England and Wales?’, BBC News, 13 August. Punch, M. (2003) ‘Rotten orchards: “pestilence”, police misconduct and system failure’, Policing and Society, 13(2): 171–96. Scott, D. (2008) ‘Creating ghosts in the penal machine: Prison officer occupational morality and the techniques of denial’, in Bennett, J., Crewe, B. and Wahidin, A. (eds), Understanding Prison Staff. New York: Routledge, pp. 168–86. Sky News (2018) ‘Prison officer convicted over two-year sexual relationship with inmate’, 4 December. Smith, R. (2014) ‘Whistleblowing and suffering’, in Brown, A., Lewis, D., Moberly, R. and Vandekerckhove, W. (eds), International Handbook on Whistleblowing Research. Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, pp. 230–49. Sykes, G.M. (1958) The Society of Captives. Princeton, NJ: Princeton University Press.

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214  Handbook on corruption, ethics and integrity in public administration Teasdale, B., Daigle, L., Hawk, S. and Daquin, J. (2016) ‘Violent victimisation in the prison context: An examination of the gendered contexts of prison’, International Journal of Offender Therapy and Comparative Criminology, 60(9): 995–1015. United Nations Office on Drugs and Crime (UNODC) (2017) Handbook on Anti-Corruption Measures in Prisons. Vienna: UNODC. Western Australia (2018) Report on Corrupt Custodial Officers and the Risks of Contraband Entering Prisons. Corruption and Crime Commission. World Prison Brief (2019) www​.prisonstudies​.org/​(accessed 20 April 2020). Worley, R. (2016) ‘Memoirs of a guard-researcher: Deconstructing the games inmates play behind the prison walls’, Deviant Behavior, 37(11): 1215–26. Worley, R. and Worley, V. (2011) ‘Guards gone wild: A self-report study of correctional officer misconduct and the effect of institutional deviance on care within the Texas prison system’, Deviant Behavior, 32(4): 293–319. Worley, R., Worley, V. and Hsu, H. (2018) ‘Can I trust my co-worker? Examining correctional officers’ perceptions of staff-inmate inappropriate relationships within a Southern penitentiary system’, Deviant Behavior, 39(3): 332–46. Wortley, R. (2002) Situational Prison Control: Crime Prevention in Correctional Institutions. Cambridge: Cambridge University Press, pp. 196–213. Wortley, R. (2015) ‘Whistle-blowers as capable guardians: The decision to report wrongdoing as a (boundedly) rational choice’, in Andresen, M. and Farrell, G. (eds), The Criminal Act. New York: Palgrave. Zimbardo, P. (2007) The Lucifer Effect: How Good People Turn Evil. London: Rider Books.

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16. Corruption in border administration David Jancsics

INTRODUCTION Corruption in border administrations is a unique form of corruption. A special combination of social and organizational factors makes these public organizations particularly prone to corruption. This chapter focuses on the main types of border corruption, the key factors, the most important variables, and the presumed relationships among them; in other words, classifications (what), explanations (why), and mechanisms (how) of corruption in border administrations. The chapter also attempts to integrate concepts from different disciplines, such as petty corruption, police corruption, workplace crime, informal networks, and brokerage, that are relevant to understanding the phenomenon. Border administrations are typically the largest public-sector agencies, and their employees conduct transactions with more people on a daily basis than any other law enforcement organizations’ personnel. For example, United States (US) Customs and Border Protection interacts with and clears into the US over 1 million people, on average, every single day (Homeland Security Advisory Council 2016). This indicates that a large number of border law enforcement officers might be exposed to corruption. The way in which border-protection activities are organized, especially the officers’ exceptional administrative monopoly and broad discretionary power over the movement of people and valuable goods across countries, also contributes to higher corruption risks on the border (Ferreira et al. 2006; Klitgaard 1988). Corruption in border administrations could significantly increase national security risks, a rather uncommon feature in other forms of corruption. In Germany, for example, more than 70 percent of illegal drugs seized every year can be attributed to detection by customs officers (Ferreira et al. 2006). Since organized crime groups are often involved in such illegal businesses, border corruption can be linked directly to the activities of crime syndicates more than any other form of corruption. Terrorist groups can also use smuggling channels and bribe border law enforcement officers in order to finance their organization through illegal trafficking or to physically relocate themselves and spread terrorist cells across countries (Chêne 2018). Communities on both sides of the border are highly interconnected. For instance, 80 percent of the people living on the US side of the country’s southern border trace their ancestry back to Mexico (Heyman & Campbell 2008). This indicates another interesting feature that border corruption is deeply embedded in local social structures on both sides and is a significant issue for public administration.

THE WHAT: CLASSIFICATION OF BORDER CORRUPTION In most cases, borders between nation states are managed by formal government authorities. While crossing a border, people, vehicles, and goods must comply with the laws of both the 215 David Jancsics - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:54PM via The University of British Columbia Library

216  Handbook on corruption, ethics and integrity in public administration exit country and the entry country. The two main general functions of border administrations are national security and revenue collection: keeping undesirable goods and people out while collecting revenue and taxes on goods that are allowed in (Doyle 2011). At official points of entry, authorities accommodate customs, immigration, and control-related activities (Zarnowiecki 2011). In most countries, the border areas between ports of entry are also patrolled by officers to prevent illegal border crossing. Yet there is a wide variation of how different states organize their border administrations. In some countries, these often overlapping tasks are carried out by one border control organization, while in many other nations each task is carried out by a special agency or department. These functions may also be organized under authorities such as police, military, or tax agencies. Border-related illegal practices may manifest through various forms, including (1) bribery, or exchange between a border law enforcement officer (bribe taker) and client(s) (bribe givers) in order to facilitate the illegal physical movement of goods and people from one country to another; (2) misappropriation, or embezzling and stealing resources from a border administration agency; (3) nepotism, or selecting and promoting people within the agency on the basis of an existing relationship rather than on merit; and (4) illicit financial flows, such as money laundering, across countries (Chêne 2018). In fact, only the first form, bribery exchange, represents genuine border corruption, since this alone is related to physical movement of goods and people from one country to another and involves participation of border law enforcement officers (Jancsics 2019a). Other forms either do not require physical border crossing (e.g. money laundering) or are not border-specific. Although conducted by employees in border authorities, such non-border specific forms (e.g. embezzlement, nepotism, or fraud) may occur in any public administration. In this analysis, border corruption is defined as an illegal exchange between two or more actors – an agent (bribe taker) and clients (bribe givers) – who may be individuals, firms, or organized crime groups. Although this chapter mainly focuses on corrupt deals between border law enforcement and clients, it is worth noting that other government personnel who work away from the border but have access to sensitive agency information (e.g. intelligence activity) may be bribed by actors who are interested in illegal movement of things across countries (Frost 2010). Moreover, employees of private companies (for example, staff from airlines, airports, or ports) may be also involved in border-related corruption (Koser 2008). Further analyzing border-related bribery by using two dimensions – the bribe giver (individual, informal group, or formal organization) and the collusive/coercive nature of the exchange – the phenomenon can be classified into six types, shown in Table 16.1 (Jancsics 2019a). Border-crossing individuals typically bribe an officer to turn a blind eye to an expired passport, overstay in a country, or small-scale smuggling of consumer goods, such as alcohol, tobacco products, or petrol. This is an ad hoc impersonal transaction where an individual tries to bribe whoever is on duty. Another coercive version of this type of “petty” corruption is when border law enforcement officers intentionally create situations in which the individual is “forced” to pay bribes. At the border, there is a significant potential for such extortion because officers have wide discretion to block people’s or goods’ physical movement. Border law enforcement officers often demand bribes for made-up offenses such as allegedly missing documentation, forms, or signatures. Another usual practice is when officers slow down border traffic and go back to normal pace only if they receive bribes from the travelers (Ndonga 2013; Wickberg 2013).

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Corruption in border administration  217 Table 16.1

Typology of border corruption

Actors on the client side

Collusion

Coercion

Individual

Individual receives illegal advantages or

Individual pays to receive fair treatment

avoids negative consequences Informal group Formal organization

Informal group reduces risks derived from Organized crime group coerces officers its illegal activity

into facilitating illegal activity

Trading company increases its official

Trading company pays to receive fair

profit by using illegal means

treatment

A qualitatively different type of border-related bribery is when an informal group, often an organized crime network, can be found on the client side of the corrupt exchange instead of just an individual. This is often a recurring activity, based on some level of trust and strategic conspiracy between the corrupt partners. Here criminal syndicates intentionally develop relationships with officers, starting with gifts and small favors and expanding into more serious and regular smuggling schemes (US Senate Committee on Homeland Security and Governmental Affairs 2010). Take the case of local smugglers in Central America, who often cultivate friendships with customs officers and meet them on a regular basis; for example, the arrangement could be to meet bi-weekly to have drinks and arrange bribes (Galemba 2012). A coercive form of this type of corruption is when drug cartels deliberately develop dependency-based and unequal social relationships with border law enforcement officers. They target people that are vulnerable and prone to infidelity or drug or alcohol abuse and exploit such vulnerabilities (US Senate Committee on Homeland Security and Governmental Affairs 2010). There are also border bribery cases when formal organizations – export/import firms or other companies moving their goods across borders – bribe border law enforcement officers to overlook overweight vehicles or undeclared goods, permit underinvoiced goods, speed up or skip inspection, permit traders to claim deductions for fictitious exports, issue import licenses or warehouse approvals without proper justification, or accept fraudulent value-added tax refund claims (Ferreira et al. 2006; Michael 2012). In a coercive version of this corruption type, officers can extort illicit payment from importers by, for example, threatening them with misclassification of imports into more heavily taxed categories unless they agree to pay a bribe (Dutt & Traca 2010).

THE WHY: EXPLANATORY FACTORS OF BORDER CORRUPTION Although many studies focus on the possible causes of corruption, I do not review this general literature here but instead discuss only the specific variables that might explain border-related corrupt activities. Multiple factors at different analytical levels can be identified. At a transnational level, a country’s geographic position creates opportunities for border corruption (Velkova & Georgievski 2004). Several countries are located at the intersection of international transport networks which makes them attractive transit corridors for drug traffickers and human smugglers. For example, organized crime groups in the Balkans cooperate with criminals in the Middle East and Latin America while enjoying relatively easy access to a huge integrated market for illicit goods and services, the European Union. During this transit process these groups have to manage to cross multiple borders, and they often bribe border law enforcement to enable their illegal activity.

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218  Handbook on corruption, ethics and integrity in public administration At a national level, the length of the border and the number of ports of entry may affect the risk level of border corruption. A country’s particular trade policy, such as higher tariff rates, may also create incentives for firms to engage in corruption (Fisman & Wei 2004; McLinden 2005). Yet the most important explanatory factors are related to the organizational and occupational structures of border administrations. The next few paragraphs focus on such organizational-level factors. The structure of the organization and the actor’s position within this structure create opportunities by providing settings where corruption might occur (Vaughan 1982; Jávor & Jancsics 2016; Graycar & Prenzler 2013: 28–9). A very unique opportunity structure, derived from the nature of the border operation, predisposes these administrations to an especially high probability of corruption. The most often mentioned factor is the combination of administrative monopoly and broad discretionary power of officers over valuable goods (Ferreira et al. 2006; Klitgaard 1988; McLinden 2005; Wickberg 2013; Ndonga 2013). The fact that relatively low-wage agents make critical decisions about whether individuals or valuable goods are allowed to enter a country may encourage officers to use such power for illegal private gain. Moreover, compared to average street-level bureaucrats, law enforcement officers deal with an especially high number of transactions on the border, which multiplies the opportunities for corruption (Parayno 2013). In many areas of public administration, technology has depersonalized the relation between public employees and private actors (e.g. online procurement), thereby reducing the risks of corruption. On the border, however, direct contact cannot be avoided because goods must still be physically inspected. The physical contact between potential corrupt partners creates further opportunity to initiate a corrupt transaction and/or develop a long-term corrupt relationship (McLinden 2005). An empirical study found that service history in border administration in the US was a strong predictor of different types of border corruption (Jancsics 2019c). Border law enforcement officers with very short service history were much more likely to be involved in drug-related corruption, while more veteran officers were instead prone to facilitate human smuggling. The organization’s geographic location and the distance between units can generate opportunity for unlawful behavior by creating structural secrecy (Vaughan 1982). The physical location of remote land borders creates “authority leakage,” which makes it difficult for the upper levels or headquarters to supervise subunits (Tullock 1965; Gounev et al. 2012). It is even harder to monitor and supervise the activity of agents who do not work at stations but patrol the border between ports of entry (Balla 2016). Moreover, in isolated border areas, clients have limited opportunity to report abuse of power, which makes extortion less risky for corrupt officers. The manner in which professional occupations are organized can also increase opportunities for corruption. The occupational structure of border administrations is very similar to other law enforcement organizations, especially police. In many countries, border control actually belongs to the national police authorities. In his classic work, Gerald Mars (1982) argues that two dimensions of the occupational process, the “grid” and the “group,” indicate a predisposition to different forms of workplace crime. The grid dimension reflects strong or weak forms of formalization and control in the workplace, while the group dimension indicates strong or weak collectiveness among co-workers. Jobs are strong in the grid dimension when employees must follow many constraining rules and a well-defined ranking system, such as wearing uniforms, which can visually separate people and predetermine their responses to one another. These jobs often fix people in specific places, times, and modes of work. The second dimen-

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Corruption in border administration  219 Table 16.2

Gerald Mars’s dimensions of the occupational process Group Strong

Grid Weak

Strong

Weak

‘Wolves’

‘Donkeys’

Tight work groups

Isolated subordinates

‘Vultures’

‘Hawks’

Loose work groups

Individual entrepreneurs

sion indicates that employees in strong group occupations frequently interact face to face and often form a mutually interconnected network. Here the work group has strong influence over even the individual’s private life. Table 16.2 shows the intersection of these two dimensions, which creates a four-category classification of occupations. Mars gave different animal names to each category. I focus on “wolves,” whose job can be characterized by both strong grid and strong group features. These occupations are based on interdependent and highly stratified roles. Mars’s strong grid-strong group category can be applied to border administrations because wolves typically work in “total institutions” such as law enforcement, prisons, the military, hospitals, and oil rigs. Wolves often live on or close to the premises at which they work; therefore, work, residence, and leisure overlap. Activities in one area are reinforced by cohesion in others, which makes them a highly collective “wolfpack” work group. Such phenomena can be seen in border corruption as well. For example, Ferreira and co-authors (2016) found that all male inhabitants of a small village in Russia close to the Ukrainian border worked at the customs office. They operated a major corruption network involving millions of dollars’ worth of custom duty evasion. Across the globe it is not uncommon that other family members or even spouses are in the same “wolf” occupation or in the same organization. Mars argues that for security reasons, teamwork and a high level of coordination are crucial and highly valued in the wolves’ criminal activity. Corrupt border law enforcement officers also rely on division of labor, where every person’s skill to organize workplace crime is used. The list of specialized activities necessary for border corruption includes organizing shifts, circulating information, falsifying paperwork, monitoring and reporting inside investigations, monitoring and punishing independently corrupt officers, doing fake cargo/vehicle inspection, redirecting and guiding illegal traffic to safe passages through the “green border,” and calculating, collecting, and sharing illegal profit. For example, a crucial risk factor, especially in the case of ad hoc petty corruption with individuals, is the large amount of cash bribes the corrupt officers receive and have to carry while they work. In order to reduce such risk, they often entrust a colleague who is finishing his/her duty with the task of collecting the money and taking it outside the border station (Kardos 2014). Such highly integrated informal networks of corrupt border law enforcement officers may allow them to deactivate an important anti-corruption tool, job rotation, or random job assignment (McLinden 2005). Corrupt outsider partners can be easily introduced to the newly assigned corrupt colleagues. On the border, the “organization of corrupt individuals” phenomenon becomes apparent after the corruption has already spread and taken root in the organization (Pinto et al. 2008). It is not rare that such collusion affects an entire local border station as a large number of officers organize themselves into collusive groups to collect bribes from clients (Pinto et al. 2008; Rose-Ackerman 1999, 51; Ferreira et al. 2006). For example, in 2015, after a police raid, 53 border law enforcement officers were indicted for

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220  Handbook on corruption, ethics and integrity in public administration corruption in Záhony, on the Hungary–Ukraine border (Magyar 2015). In these types of cases, officers do not hide corruption, or even boast that they can afford lavish consumption due to the bribe money they received. In this case, the Hungarian officers shared photos on social media with their colleagues from expensive vacations (Magyar 2015). This suggests that they perceived minimal risk of detection and sanctioning by the organization (Vaughan 1983: 76). Sometimes, key posts along smuggling corridors are even informally auctioned within the agency. For example, in Mexico, several senior drug enforcement posts were given to the highest bidder (Andreas 2009: 63). In Cambodia in the early 2000s, an approximate $10,000 “concession fee” was required by future employees to secure a customs post (Ferreira et al. 2006). Similar practices were reported in Pakistan (Hors 2001).

THE HOW: SOCIAL AND ORGANIZATIONAL MECHANISMS OF BORDER CORRUPTION Corrupt transactions, just like many other activities in our social lives, are coordinated by various mechanisms (Frances et al. 1991). In border corruption, there are two main areas where the actors’ behaviors are coordinated: interactions between the border law enforcement officers and the client(s), and interactions between the officers and other organizational members inside the agency. Here I discuss the variation is such mechanisms. Mechanisms between the Officer and the Client(s) When border-crossing individuals bribe a border law enforcement officer, the corrupt deal is typically an impersonal act (market corruption), consisting of a transfer and an immediate counter-transfer between two strangers (Jancsics 2019b). The officer’s main motivation for participating in this type of “petty” corruption is to collect illegal profit, while the individual client engages in market corruption to receive special treatment. In the coercive version of this type of corruption, the client engages in the illegal act because this is the only way he or she can reduce the cost (e.g. slow border traffic) created by the agent. In these market-type exchanges the “price” captures all relevant information and coordinates the actors’ behavior(s) (Powell 1990; Jancsics 2019b). If benefits are high and/or costs are low enough to take the risk, the agent and the client will break the rules and participate in corruption. Since the actors’ social contexts are relatively irrelevant in this situation, social norms play a limited role in coordinating their behaviors. When an informal group, often an organized crime network, can be found on the client side of the corrupt exchange, social bonds and some level of trust between the officer and the client(s) have been established. Instead of price mechanisms, these transactions are often coordinated by reciprocity, a universal social norm that can be found in almost all cultures (Graycar & Jancsics 2017). Reciprocity means lending resources to someone who then feels an obligation and therefore will compensate in the future (Peebles 2010). These gift-type transactions make social bond-based bribes a much safer form of illegal exchange for the participants than market corruption. Beyond the obligation to reciprocate, other informal norms may also coordinate the interactions between the officers and the client(s). Many agents come from the border regions or surrounding areas where family ties and relations are very strong (Heyman & Campbell 2008;

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Corruption in border administration  221 Velkova and Georgievski 2004). For example, an earlier empirical study claims that in the US, 56 percent of border patrol officers and 89 percent of port of entry inspectors grew up in border counties (Heyman 1995: 272). This suggests potential kinship or friendship connections to people who are directly or indirectly involved in local smuggling activities (Gounev et al. 2012). In this case, powerful informal norms of the local community or the family network may facilitate the social bribe transactions. For example, a customs and border protection official in El Paso, Texas worked with his wife and brother-in-law in a drug-trafficking ring (Cobler 2016). Corrupt clients do not always come directly into contact with border officers; rather, sometimes they have contact with intermediaries (Gounev et al. 2012). Brokerage is an informal mechanism by which disconnected or isolated actors can interact (Jancsics 2018). There are two different functions of brokerage: (1) middleman brokerage, when the broker facilitates the flow of goods or resources but remains in the middle of otherwise unconnected actors, and (2) catalyst brokerage, when the broker creates new connections by introducing previously unconnected people (Stovel & Shaw 2012). In border corruption, examples of both functions can be found. In human smuggling, smugglers often act as middlemen between the bribed officer and the trafficked refugees or immigrants. They usually do not allow the two parties to connect. On the other hand, fellow social group members may act as catalyst brokers and introduce clients and agents to each other (Jancsics 2015). Since border officers often live in the same areas/ communities in which their work sites are located, informal relation structures outside and inside the organization can overlap and form a single social field. Therefore, it is possible that the corrupt officer, his/her colleagues, and their clients belong to the same social network. They socialize and even spend their leisure time together. This suggests that the same informal norms facilitate their behaviors. For example, in a well-publicized case, a colleague of a US customs and border protection officer in San Diego, California introduced him to a female smuggler, who ended up marrying him. She acted as his go-between during a decade-long corruption operation and introduced the officer to several other smugglers (Davis 2013). There are border corruption cases where neither an individual nor an informal group but a whole formal organization is the primary and direct financial beneficiary of the corrupt transaction. These are “bureaucracy-to-bureaucracy” transactions, where both parties exchange organizational resources instead of private or community resources (Graycar & Jancsics, 2017). This collusive border corruption can be either ad hoc market corruption or social bribe-type corruption and therefore can be coordinated by either “prices” or reciprocity and brokerage. For example, in order to reduce the costs of border crossing, truck drivers or other representatives of a company – often with the informal support of their supervisors – may bribe anyone who is on duty to do things like overlook overweight vehicles or undeclared goods, permit underinvoiced goods, speed up or skip inspection, permit traders to claim drawbacks for fictitious exports, issue import licenses or warehouse approvals without proper justification, or accept fraudulent value-added tax refund claims (Dutt & Traca 2010; Ferreira et al. 2006; Michael 2012). As part of the cost of doing business, export/import firms even calculate how much should be paid as illegal bribery (Mathews 2015). Corrupt border officers also extort bribe payments from formal organizations. For example, they can threaten importers with misclassification of imports into more heavily taxed categories unless they agree to pay them a bribe (Dutt & Traca 2010). The most vulnerable representatives of formal organizations are truck drivers, especially those with perishable freight, who can be easily

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222  Handbook on corruption, ethics and integrity in public administration forced to pay bribes just to avoid an overnight wait at the border. There are many anecdotes from Eastern European countries that truck drivers keep handy several packs of cigarettes, high-quality liquor, or small bills in local currency while crossing multiple borders just in case they have to bribe coercive border officers. Yet since this market-type corruption is exceptionally risky exporters who intend to avoid tariffs on a permanent basis may seek out personal connections among border officers in order to make the bribe payment standard and corruption more predictable. Therefore, they prefer reciprocity-based social bribe exchanges when they can make corrupt business arrangements repeatedly with the same officers to impersonal market-type transactions. With this arrangement, mutual trust allows actors to conspire strategically. For example, days or weeks after a transaction, the partners can meet in a neutral place (restaurant, bar, hotel, or private apartment) to make the payment and schedule the next transaction. As an example of middleman brokerage coordination, exporters, interested in quick processing, may allow the forwarding agency to act as a middleman and bribe the customs officials (Velkova & Georgievski 2004). Mechanisms between the Officers and Other Organizational Members Border corruption is often a collective organizational activity, and informal norms coordinate corruption within the administration (Ashforth & Anand 2003). For example, agents often share the obligation of distributing the profits from corrupt practices with colleagues and superiors (McLinden 2005; Magyar 2015). People who do not follow these norms, such as those who work independently or are not corrupt, are often punished by the group (Mars 1982). Interviews with border agents confirm that corrupt officers start bullying those who are “not in” because they represent imminent risk for the groups’ corrupt operation. Moreover, new employees on the force are usually asked after one month of service whether they “want to make a little money” (Magyar 2015). Informal norms in a highly integrated workforce also prevent reporting of corruption. Covering up the illicit or illegal behavior of colleagues is a phenomenon empirically confirmed by police corruption research (Westmarland 2005; Chan 2003: 34). Such corrupt organizational subcultures help socialize non-corrupt new recruits into accepting corruption. However, people also enter border agencies solely for the purpose of being corrupt and taking advantage of the discretion they have as an officer (US Senate Committee on Homeland Security and Governmental Affairs 2010).

IMPLICATIONS FOR PRACTICE This chapter has some implications for practice and provides policymakers with a tool to distinguish between different types of border corruption and to strengthen decision making regarding anti-corruption policies. Since officers in border control administrations work away from organizational centers or headquarters (e.g. night shifts, streets, entry ports, remote land borders, rural areas), frequently meet many outsider clients, and have considerable discretion in making decisions monitoring their activities, their situation is more challenging than in other public organizations. Yet some technological innovations such as body cameras and other surveillance systems tracking officers’ movement with GPS might improve the effectiveness of monitoring.

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Corruption in border administration  223 Since one of the most powerful drivers in petty border corruption is the agent’s rational calculation, maximizing the costs of corruption and minimizing the benefits are effective anti-corruption tools against market-type border corruption. Here punitive control techniques to detect and punish corrupt border law enforcement officers can be successful. Intelligence practices such as wiretaps, body microphones, or faked situations (sting operations) are well suited against this type of border corruption. Moreover, limiting the cash amount officers can carry might reduce the opportunities for accepting a bribe “on the spot.” Finally, external whistleblowing might be an effective tool against extortion-type petty border corruption. Forcing individual travelers to get involved in a corrupt exchange despite their will may trigger disapproval and protest against extorters and a willingness to report corrupt officers. It is more difficult to detect and curb social bribe-type border corruption because trust between corrupt partners allows them to effectively conspire for a long time. Here the level of trust is an important factor. If partners are connected only with weak social ties (lower-level trust), then asymmetric (top-down) penalties such as exemption from prosecution or lighter punishment imposed by internal or external authorities will increase the chance of (self-) reporting. However, if the partners are closely connected (e.g. friends or family members), informal norm systems facilitating the social relationship often clash or even supersede with formal rules and reduce the effectiveness of the threat of formal sanctions. Yet some techniques can deter the already arranged corrupt transaction or reduce the opportunity for conspiring in social bribe-type border corruption. Such techniques include prohibiting private cell phone use on duty; assigning duty locations, security lanes, or areas to patrol randomly; or limiting clients’ options to freely choose border lanes.

REFERENCES Andreas, P. (2009). Border games: Policing the US–Mexico divide. Ithaca, NY: Cornell University Press. Ashforth, B.E., & Anand, V. (2003). The normalization of corruption in organizations. Research in Organizational Behavior, 25, 1–52. Balla, J. (2016). A határrendészeti szolgálati ág korrupciós veszélyeztetettsége. Budapest: National University of Public Service. Chan, J.B.L. (2003). Fair cop: Learning the art of policing. Toronto: University of Toronto Press. Chêne, M. (2018). Corruption at borders. U4 expert answers. www​.u4​.no/​publications/​corruption​-at​ -borders​.pdf (accessed September 12, 2019). Cobler, N. (2016). Border corruption often has family roots. Texas Tribune, July 8. www​.texastribune​ .org/​2016/​07/​08/​family​-ties​-can​-lead​-border​-corruption/​ (accessed September 12, 2019). Davis, K. (2013). Border officer guilty in smuggling scheme. San Diego Union-Tribune, December 19. www​.sandiegouniontribune​.com/​sdut​-jones​-hammer​-customs​-border​-verdict​-jury​-guilty​-2013dec19​ -story​.html (accessed September 12, 2019). Doyle, T. (2011). The future of border management. In G. McLinden, E. Fanta, D. Widdowson, & T. Doyle, eds, Border management modernization. Washington, DC: World Bank, pp. 11–22. Dutt, P., & Traca, D. (2010). Corruption and bilateral trade flows: Extortion or evasion? Review of Economics and Statistics, 92, 843–60. Ferreira, C., Engelschalk, M., & Mayville, W. (2006). The challenge of combating corruption in customs administrations. In J. Campos & S. Pradhan, eds. The many faces of corruption. Washington, DC: World Bank, 367–86. Fisman, R., and Wei, S. (2004). Tax rates and tax evasion: Evidence from “missing imports” in China. Journal of Political Economy, 112, 471–500. Frances, J., Levacic, R., Mitchell, J., & Thompson, G. (1991). Introduction. In T. Grahame, J. Frances, L. Rosalind, & M. Jeremy, eds. Markets, hierarchies and networks. London: Sage, 1–21.

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224  Handbook on corruption, ethics and integrity in public administration Frost, T.M. (2010). Border related corruption. Trends in Organized Crime, 13, 179–83. Galemba, R. (2012). Taking contraband seriously: Practicing “legitimate work” at the Mexico– Guatemala border. Anthropology of Work Review, 33, 3–14. Gounev, P., Dzhekova, R., & Bezlov, T. (2012). Study on anti-corruption measures in EU border control. Sofia: Center for the Study of Democracy. Graycar, A., & Jancsics, D. (2017). Gift giving and corruption. International Journal of Public Administration, 40, 1013–23. Graycar, A., & Prenzler, T. (2013). Understanding and preventing corruption. New York: Palgrave. Heyman, J. (1995). Putting power in the anthropology of bureaucracy: The immigration and naturalization service at the Mexico–United States border. Current Anthropology, 36, 261–87. Heyman, J., & Campbell, H. (2008). Corruption in the US borderlands with Mexico: The “purity” of society and the “perversity” of borders. In M. Nuijten and G. Anders, eds. Corruption and the secret of law: A legal anthropological perspective. Aldershot: Ashgate Publishing, 191–217. Homeland Security Advisory Council (2016). Final report of the CBP Integrity Advisory Panel. www​.dhs​.gov/​sites/​default/​files/​publications/​HSAC​%20CBP​%20IAP​_Final​%20Report​_FINAL​ %20(accessible)​_0​.pdf (accessed September 12, 2019). Hors, I. (2001). Fighting corruption in customs administration: What can we learn from recent experiences? OECD Working Paper No. 175. Jancsics, D. (2015). “A friend gave me a phone number”: Brokerage in low-level corruption. International Journal of Law, Crime and Justice, 43, 68–87. Jancsics, D. (2018). Brokerage. In A. Ledeneva, ed. The global encyclopaedia of informality: Understanding social and cultural complexity. London: University College London Press, 205–8. Jancsics, D. (2019a). Border corruption. Public Integrity, 21, 406–19. Jancsics, D. (2019b). Corruption as resource transfer: An interdisciplinary synthesis. Public Administration Review, 79, 523–37. Jancsics, D. (2019c). Law enforcement corruption along the US borders. Security Journal. https://​doi​ .org/​10​.1057/​s41284​-019​-00203​-8 Jávor, I., & Jancsics, D. (2016). The role of power in organizational corruption: An empirical study. Administration and Society, 48, 527–58. Kardos, S.I. (2014). A rendőri korrupció színterei. Belügyi Szemle, 62, 99–112. Klitgaard, R. (1988). Controlling corruption. Berkeley, CA: University of California Press. Koser, K. (2008). Why migrant smuggling pays? International Migration, 46, 3–26. Magyar, K. (2015). Százezrek a melltartóban – Korrupció a záhonyi határátkelőnél. Magyar Narancs. http://​magyarnarancs​.hu/​kismagyarorszag/​szazezrek​-a​-melltartoban​-97594 (accessed September 12, 2019). Mars, G. (1982). Cheats at work. Sydney: Allen and Unwin. Mathews, G. (2015). Taking copies from China past customs: Routines, risks, and the possibility of catastrophe. Journal of Borderlands Studies, 30, 423–35. McLinden, G. (2005). Integrity in customs. In L. De Wulf & J. B. Sokol, eds. Customs modernization handbook. Washington, DC: World Bank, 69–89. Michael, B. (2012). Do customs trade facilitation programs help reduce customs-related corruption? International Journal of Public Administration, 35, 81–97. Ndonga, D. (2013). Managing the risk of corruption in customs through single window systems. World Customs Journal, 7, 23–37. Parayno, G. (2013). Combatting corruption in the Philippine customs service. In P. Larmour and N. Wolanin, eds. Corruption and anti-corruption. Canberra: Australian National University Press, 204–20. Peebles, G. (2010). The anthropology of credit and debt. Annual Review of Anthropology, 39, 225–40. Powell, W. (1990). Neither market nor hierarchy: Network forms of organization. Research in Organizational Behavior, 12, 295–336. Pinto, J., Leana, C.R., & Pil, F.K. (2008). Corrupt organizations or organizations of corrupt individuals? Two types of organization-level corruption. Academy of Management Review, 33, 685–709. Rose-Ackerman, S. (1999). Corruption and government: Causes, consequences and reform. New York: Cambridge University Press. Stovel, K., & Shaw, L. (2012). Brokerage. Annual Review of Sociology, 38, 139–58.

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Corruption in border administration  225 Tullock, G. (1965). The politics of bureaucracy. New York: Public Affairs Press. US Senate Committee on Homeland Security and Governmental Affairs (2010). New border war: Corruption of US officials by drug cartels. Washington, DC: Government Printing Office. Vaughan, D. (1982). Toward understanding unlawful organizational behavior. Michigan Law Review, 80, 1377–402. Vaughan, D. (1983). Controlling unlawful organizational behavior: Social structure and corporate misconduct. Chicago, IL: University of Chicago Press. Velkova, E., & Georgievski, S. (2004). Fighting transborder organized crime in Southeast Europe through fighting corruption in customs agencies. Southeast European and Black Sea Studies, 4, 280–93. Westmarland, L. (2005). Police ethics and integrity: Breaking the blue code of silence. Policing and Society, 15: 145–65. Wickberg, S. (2013). Literature review on corruption in cross-border business. U4 expert answers. https://​assets​.publishing​.service​.gov​.uk/​media/​57a089fced915d3cfd000512/​ExpertAnswer​-391​.pdf (accessed September 12, 2019). Zarnowiecki, M. (2011). Borders, their design, and their operation. In G. McLinden, E. Fanta, D. Widdowson, & T. Doyle, eds. Border management modernization. Washington, DC: World Bank, 37–78.

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17. Features of corruption and anti-corruption work in China and India Lina Vyas and Alfred M. Wu

INTRODUCTION The world’s two most populous nations, China and India, do not fare well in the corruption stakes. Both have massive bureaucracies; both have decentralised bureaucracies and the opportunity for corruption abounds. In the 2019 Corruption Perception Index by Transparency International both scored 41 out of 100 points and both ranked an equal 80th out of 180 nations. The widespread existence of corruption is both an issue for the well-being of the economy and society, as well as an issue for the public sector and the legitimacy of administration. In China, corruption has a long history, especially in the political arena. However, there have been improvements in recent years under Xi Jinping’s anti-corruption campaign (China’s Tiger Hunt, see Vyas & Wu, 2020). The establishment of new laws aimed at making the working environment of government officials more transparent also works. In India, corruption is still a major problem affecting the economy costing Indian people approximately 6 trillion rupees in unofficial payments every day. Over the past few decades, India has gone through a series of public- and private-sector scams across the country, for example the Indian 2G spectrum scam propelled by pressure to catch up with China in meeting the demand for telecommunications services. In recent years, in order to foster a clean government, the Indian government has tried several urgent economic measures, such as demonetisation in 2016. In spite of the efforts, as previous research indicated, the legal framework and the law enforcement system have not shown a significant effect on corrupt behaviour. This means that policy cannot be implemented cleanly and impartially, and as such corruption creates a weakness of government capacity (Graycar & Villa, 2011). This chapter examines and compares the different ways in which corruption has developed in the economies of China and India together with the different approaches taken by respective governments in tackling the problem of corruption. It also distinguishes the causes and effects of the reforms both governments have used to reduce corruption. This review is based on secondary data, including comments from newspapers and major reviews of recent articles on anti-corruption. The institutional arrangements of the anti-corruption work in China and India are discussed, followed by the reforms and limitations of the anti-corruption initiatives undertaken in each country. The chapter can be divided into two parts. Both parts include the backgrounds of the countries’ economies and politics, but the first half of the chapter discusses socio-economic factors and anti-corruption laws in China and India and is supplemented by pressing issues of corruption cases which have appeared in the media. The second half of the chapter discusses the structures of anti-corruption systems in both places, including supervision, local party committees and anti-corruption development. In addition, recent reforms and anti-corruption laws are analysed and the major players in anti-corruption work are identified. 227 Lina Vyas and Alfred M. Wu - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:56PM via The University of British Columbia Library

228  Handbook on corruption, ethics and integrity in public administration The first section argues that the general public lacks legal literacy and the implementation of anti-corruption educational programmes in schools could help to solve this problem. The second section argues that anti-corruption measures create uncertainty and fear among officials in all dimensions. This section ends with the analysis of the challenges and limitations of anti-corruption measures in both countries. The concluding section discusses corruption reduction. This section includes a brief summary of the anti-corruption measures, major players in anti-corruption work, challenges and side effects of anti-corruption measures.

THE INSTITUTIONAL ARRANGEMENT OF ANTI-CORRUPTION WORK IN CHINA There is great variation of corruption based on culture, traditions and the political systems. Therefore, when discussing corruption in China, it is necessary to focus on the social situation, political system and its development. The study of China’s corruption needs to focus on more relevant parts, including the anti-corruption system, power restriction system and the political system. The institutional framework of anti-corruption mechanisms can be divided into several periods. The first starts when the Communist Party was established in 1921. The anti-corruption methods were only used within the government structure and in the military system and before the Communist Party obtained full control over the country. After 1949, the Communist Party of “new” China tried to combine the anti-corruption system with the development of socialist construction. The most important thing was to make sure the officials were truly loyal to the government and the party which was believed to be essential for the stability and purity of the government. Another important factor in the fight against corruption at that time was the political campaign led by the party. Mao Zedong, then the chairman of the Chinese Communist Party (CCP), implemented a campaign, which included a political mobilisation from top to bottom to fight corruption. Two departments carried out a significant part of the campaign. One was a commission for discipline inspection, a department that was directly controlled by the CCP. Its duty was to safeguard the constitution and internal laws. Another department participating in the campaign was the supervision department, which worked for the government. Its role was to supervise the exercise of administrative power by state administrative organs and their civil servants. The two departments cooperated in monitoring officials in working situations and corruption prevention (Ko & Weng, 2012). Anti-Corruption Legislation In the period from the late 1970s to the 1990s, apart from the anti-corruption methods mentioned above, the government began to develop a more complete system of anti-corruption work. In the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China in 1978, it was decided to re-establish the CCP’s commission for discipline inspection. Thus, the CCP began to build an organisational system, an institutional system, a working system and a personnel system to prevent corruption. In addition, in June 1987, the government re-established the Ministry of Supervision by constructing an organisational, work and personnel system to punish and prevent corruption. The major goals of the commissions for discipline inspection were to safeguard the constitution of China and other internal rules and

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Corruption and anti-corruption work in China and India  229 regulations. The party’s commission held regular integrity talks to inspect the leading bodies and fight against corruption. It also implemented a responsibility system to promote honesty and loyalty to the party and the government. In the 1990s, the anti-corruption system became more rigorous. To better fight corruption, the government introduced some new laws, such as the Administrative Procedure Law, State Compensation Law, Administrative Procedural Law, Administrative Licensing Law and Government Information Disclosure Regulations. These laws and regulations aimed at making the working environment of the government officials transparent. The laws also covered the punishments of the officials caught in corruption cases. The new laws made the institutional framework of the anti-corruption measures more strategic and comprehensive than before. They showed that the government and the party were more conscious in their fight against corruption. It is possible to identify three core elements in the laws related to corruption. These are (1) the civil servants’ declaration of the assets, (2) the financial real-name system and (3) the civil servants’ avoidance of conflicts of interest. The declaration system for civil servants made it difficult for officials to hide any illegal gains. The financial real-name system required every citizen to use his/her real name when opening an account at any financial institution. Additionally, all financial transactions had to use the real names of the involved parties and the transactions had to be recorded. The avoidance of conflicts of interest stated that public servants could not concurrently hold more than one public office or hold other posts besides the public office post. Public servants were also prohibited from engaging in part-time jobs that generate behavioural conflicts or inconsistent financial interests. Moreover, it was stated that no public official should engage in business or accept any employment or work without prior approval of the government. In recent decades, the internal main reasons for corruption in China were related to the ways the party officials were able to monetarise their positions (Brown, 2018). After building up a comprehensive system, including introducing laws concerning corruption and establishing a department concentrating on anti-corruption work, fighting corruption did not slow down. Nonetheless, it must be acknowledged that the state-owned enterprises create a blur between the government and business corruption (Wedeman, 2013). In the Media Before considering the trending news on corruption and anti-corruption campaigns, it is necessary to mention that Chinese media is required to be loyal to the CCP, who holds the leadership of the country. In 2016 President Xi visited major news outlets in China to remind the media of absolute loyalty. Notwithstanding, Western media covers criticism and is able to raise questions regarding legitimacy by government actions and describe the ambiguity of arrests related to corruption activities. An article in the South China Morning Post stated that within six years of President Xi Jinping’s fight against corruption, the “Communist Party’s graft-busters detained another 23 ‘tigers’ – or high-ranking officials – in 2018, five more than the previous year. Prosecutors also charged 32 provincial- and ministerial-level officials last year, which was 14 more than in 2017” (Zheng, 2019a). This article shows that it is important for the Chinese government to raise the number of corruption cases to prove the efficiency of present policies. Another news story from NBC News highlights the power of Xi indicating that more than 1,000 Chinese absconders who left the country were made to return last year and more than $519 million of

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230  Handbook on corruption, ethics and integrity in public administration corruption money was recovered. An operation known as “Sky Net” was introduced to further highlight the ongoing anti-corruption drive Xi launched more than eight years ago. The following news in a foreign media outlet stated: “The year’s tally does not indicate the party watchdog and prosecutors went after more senior scalps in 2018 – many of the cases prosecuted were the result of lengthy investigations carried out over previous years” (Zheng, 2019c). The former Chinese president of Interpol, Meng Hongwei, was expelled from the CCP and stripped of all his positions for serious violation of the law and discipline. When announced, this news resonated strongly throughout society. The news then spread in many countries and newspapers (BBC News, 2018; PTI, 2019; Zheng, 2019c): “Meng was last heard from on September 25 after leaving his home in the French city of Lyon bound for China.” NBC News reported: Beijing has been chosen together with two other provinces to pilot the crackdown’s expansion beyond the ruling Communist Party to government officials and people working for state-owned enterprises as well as those providing education, health and other services. “This will ensure that supervision covers everyone working in the public sector who exercises public power,” said Zhang Shuofu, director-general of the newly established Beijing Municipal Supervision Commission. (Baculinao, 2018)

Long-time China watcher Anne Stevenson-Yang, told Barron’s magazine that this “much ballyhooed anti-corruption campaign” is “an old-style party purge reminiscent of the 1950s and 1960s with quota-driven arrests, summary trials, mysterious disappearances and suicides” (Laing, 2014). She felt uncomfortable that Xi’s anti-corruption campaign had been depicted as a good governance effort. Another interesting comment is from the former head of the American Chamber of Commerce in China and current chairman of the greater China office for APCO Worldwide, McGregor, who buys into Xi’s rhetoric about strengthening the rule of law in China. With the goal of bringing greater legal certainty and transparency to the system Xi is “playing a long game”, McGregor said (Hewitt, 2019). Another fresh case highlighting the CCP’s new milestone in anti-corruption work was reported by Reuters (2019a): “‘China’s military must resist the “corrosion” of corruption and ensure the fight against graft is deepened,’ President Xi Jinping told senior officers… ‘offering a renewed warning against a deep-seated problem’.” Another Reuters news article told that China’s anti-corruption watchdog “would prosecute Nur Bekri, one of the highest-ranking ethnic Uighur officials in the country, over allegations of graft during his time as governor of Xinjiang” (Reuters, 2019b). According to the South China Morning Post (Zheng, 2019b), the arrest of Zhao Zhengyong, who served as governor and then as provincial party head of Shaanxi province, was foreshadowed by a state television documentary on corruption in Shaanxi province days before the official announcement. Zhao Zhengyong was an ally of Wei Minzhou, the former deputy head of the Shaanxi People’s Congress. Wei is currently serving a life sentence.

INSTITUTIONAL ARRANGEMENTS OF ANTI-CORRUPTION WORK IN INDIA Every year Indians spend about 6 trillion rupees, approximately US$84 billion, on “unofficial payments” to government officials. Corrupt payments are often required to obtain driver’s

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Corruption and anti-corruption work in China and India  231 licenses, birth and death certificates and passports. Corruption touches in one form or the other almost every person in India. According to research by the non-governmental international organisation Transparency International, 27 per cent of the world’s population has at least once in the last 12 months resorted to giving bribes when applying to state institutions. Some statistics show that almost half of the funds intended to cover various programmes to improve the quality of life are going to numerous officials or businessmen. Based on the recent data, there are more than 250 million people in India who are considered poor and almost 300 million do not have access to electricity. Furthermore, about 100 million people have no access to clean water. The sanitary and hygienic living conditions of more than half of Indians do not meet international standards (about 800 million people). The most corrupt entities in India, as in China and many other countries, are political parties. However, at least in theory, they should be the most transparent institutions. Meanwhile, according to Slonskaya (2015), 86 per cent of respondents covered by various surveys characterised political parties as prone to corruption. Second place was taken by the police (approximately 75 per cent) and third was shared between officials and legislative bodies (65 per cent). For educational institutions, the corresponding figure was 61 per cent, and for the judicial system 45 per cent (Slonskaya, 2015). The least corrupt were non-governmental organisations and military organisations. In that study, 62 per cent of respondents said they paid a bribe when they contacted the police, 61 per cent with the authorities responsible for registration and issuing permits, 48 per cent paid bribes to educational institutions and 36 per cent to judicial authorities. More than half of those living in India believe that over the past two years, the situation with corruption in the country has worsened. This is evidenced by the data obtained in various surveys by Transparency International. Simultaneously, Indians connect corruption not only to the direct bribing of officials. People believe that personal contacts and connections also help to achieve their desired goals. In terms of trust in the government, India was placed 115th out of 143 (World Economic Forum, 2013). Of the respondents, 40 per cent are confident that the country is ruled by a small group of people who are not interested in the prosperity of the state, but in the realisation and achievement of their own selfish goals. In this regard, the state cannot and does not want to fight corruption, and all measures taken by the authorities to eliminate it are not sufficiently effective. Corruption is a major problem affecting the economy. In the last decades, India has been through a number of public- and private-sector scams across the country. The World Bank (2010) believes corruption is one of the biggest obstacles to economic management, business and social development. Corruption mostly happens in three areas and can be divided into bureaucratic corruption, political corruption and economic corruption. According to the World Bank (2019), India is not just the largest democracy in the world where more than 1.2 billion people live. India is an important economic centre, demonstrating high rates of annual gross domestic product (GDP) growth in the 2000s and significantly exceeding the corresponding figure of global growth rates. However, economic growth has slowed down latterly according to International Monetary Fund forecasts. The negative trends in the Indian economy are the result of various factors, including domestic ones, such as the ineffective regulation of many sectors in the country and external factors – a general slowdown in the global economy, falling prices for export goods, lack of investment inflows, etc.In the meantime corruption, increasingly widespread, has become a real disaster affecting not only several sectors of the economy, including foreign economic activity, but also the entire society in India. Furthermore, acute problems such as

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232  Handbook on corruption, ethics and integrity in public administration poverty, a low level of education, lack of access to clean water for a significant proportion of the population and lack of electricity and other amenities necessary for a normal life do not find a quick solution, largely due to the deeply embedded corruption of public and private institutions. Socio-Economic Factors Although, unfortunately, corruption covers almost all spheres of public life, “corruption in the form in which it exists in India undermines institutional development”, says Jagdish Bhagwati at Columbia University (2004). Public governance, law and order, schools, health and social welfare affect the level of literacy and education. In fact, in schools run by politicians, it is reported that the literacy rate is lower than 75 per cent and these schools usually do not meet quality standards (Aranha, 2018). This results in difficulties for fresh graduates to find jobs. According to Slonskaya (2015), health care has its hardships as 7 per cent of medical products are fake. In terms of welfare, Slonskaya (2015) added that because of illegal actions of thieves or politicians, 14 per cent of Indian citizens claimed that they had lost their property. The huge public funds that should have been spent on educating a stratum of highly professional Indians are being negatively affected. Poverty problems are still acute for India. At the same time, according to some estimates, about 20 million tons of wheat disappears annually only because of the insufficiently developed infrastructure of the storage and transportation of grain. It is not possible to ensure proper conditions in this area due to the high level of corruption of the relevant departments. However, the necessary conditions to include foreign capital and the activities of foreign companies in the Indian market have not been improved and actually worsened to some extent. The same is evidenced by a fall in the inflow of foreign direct investment in recent years. Compared with their growth in the early 2000s, the inflow of foreign investments in the national economy of India has slowed significantly. Worse yet, there is also an outflow of funds. Thus, the illegal outflow of capital from the country for the last period averages about $52 billion a year (Global Financial Integrity, 2015). In the Media Major cases of corruption, which were found out in India and reported in the media, are related to scandals, either social or economic issues in connection with corruption. According to the Indian newspaper the Economic Times, from the beginning of 2015 until March 2017, India needed about US$1 trillion of investments to implement infrastructure projects such as the construction of ports, airports, roads and to give the entire economy a powerful impetus for further development. According to the former judge of the Supreme Court, Santosh Hedge, who was investigating a scandal in the south of the country, “today, politicians in India have such power that together they are able to completely plunder the country.” Such scandals demonstrate a complete inability and the unwillingness of the government to deal with existing problems. But if during periods of active economic growth this was not given importance, now, given the slowdown in the economy, according to many analysts, the country simply cannot afford to have a government that does not fulfil its promises in such a blatant way.

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Corruption and anti-corruption work in China and India  233 In the early 2000s, Indian leaders set a goal – to provide electricity to the entire population of the country by 2012. This was supposed to be accomplished through the construction of thermal power plants across the country. However, this has not been done so far. The scandal that erupted in the coal industry only worsened the situation in the energy sector, and the inability to produce enough electricity was one of the main factors hindering economic growth. In 2010, in connection with the corruption charges against him, P. J. Thomas, head of the Indian anti-corruption body, was forced to leave his post. In the same year, many officials responsible for conducting the Commonwealth Games were arrested for alleged financial fraud. According to some estimates, the holding of these Games cost the country $4.1 billion instead of the previously estimated $270 million (Commonwealth Games, 2010).

ORGANISATIONS, REFORMS AND LIMITATIONS IN CHINA Supervision Committees With the enactment of the National Supervision Law of the PRC in 2018, Supervisory Commissions at all levels of the country were formed to exercise the supervisory function of the state. In accordance with the Supervision Law, the commissions supervise all public officials who exercise their power, investigate violations and crimes and promote the development of the anti-corruption system. Supervision Commissions are established within different territory and municipal levels: provinces, autonomous regions, prefectures, districts within cities, and counties. Local Party Committees The local party committees refer to the CCP committees at all levels. The local party committees have a duty to supervise the party members under their jurisdiction to earnestly fulfil their obligations, improve their work quality and responsibility, enhance the party spirit, strictly organise party life, carry out criticism and self-criticism and maintain and implement party discipline. Compared with higher-level party committees, local party committees have more detailed and targeted responsibilities. They play an important role in preventing corruption in society. Supervising and educating employees at the bottom level ensures the integrity of officials at all levels; but also effectively prevents corruption at the top from affecting party committees at the grassroots level. Leading Control in the Anti-Corruption System As the leader of the CCP and China, Xi Jinping has a special method against corruption, consisting of three steps or goals. The first goal is to have politics back in control. Media outlets have called President Xi the most powerful leader of China since Mao. Some researchers pointed out that Xi views his detailed and comprehensive knowledge as one of the reasons for his political success (Brown, 2018). He has largely followed the rule that politics must play a leading role. The second goal is to improve morality in society and seek loyalty. However, while there seems to be a strong institution against corruption, corruption still has a chance to

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234  Handbook on corruption, ethics and integrity in public administration occur from the inside. The most significant incidences are the Bo Xilai and Ling Jihua cases, where two previously high-level officials in the CCP were sentenced for corruption. It is reasonable that much of the discussion on how to fight corruption focuses on how to transfer power and influence from individuals to the party. A major problem has been that even those who are in charge of handling corruption cases would later succumb to corruption because of their desire for a higher position or more money. Therefore, another way to fight corruption is to demand officials for loyalty to the party. Thus, Xi has demanded that newspapers, television and radio stations are loyal to his government. Xi has also vowed to punish both tigers and flies (tigers refer to corrupt high-ranking officials and flies rank-and-file public-sector workers, see Vyas & Wu, 2020). This means that the party and government are determined to fight corruption at all levels of society. The third goal is to keep equity and efficiency in policy work. Another way to help officials become more cautious about corruption is the use of technology for discretionary arrests, local investigations and the creation of uncertainty and fear among those who could be involved in corruption cases. Local government involvement in managing government integrity is encouraged by the central government and has been achieving far-reaching results (Gong & Wu, 2012; Gong, 2015). The cases, especially those translated in the media, help to rouse awareness among government officials to prevent illegal actions. By reason of party controls the key instruments of the economy, business and politics should have no ambiguity or doubt in the strength of government regulations. However, it is not always the case in reality. Creating a Balance Since late 2012, after Xi Jinping became the leader of China, the anti-corruption work has reached a “new normal.” Many officials who work for the government, including both the ones who have the most power and the ones working in the lower positions, have been investigated, prosecuted and/or found guilty. Such cases are highlighted and confirmed in the media. The case of Xi’s anti-corruption actions shows that transparency is significant. It is evident that prior to Xi’s anti-corruption work, corruption cases were mostly dealt with within the party and stayed out of the public eye. However, after Xi took up the leadership role, the most significant change in fighting corruption was that corruption cases became public. Consequently, transparency has been one of the most significant changes in anti-corruption work in China. This indirectly shows the determination and tough methods used in fighting corruption. It is obvious that Xi’s methods do not solely focus on corruption or tackling the problems through internal channels. This means that the institutional methods have also changed. Starting from the institutional reform and preparatory work of the anti-corruption campaign, the simplicity of the establishment of the national supervisory commission system has transformed into an original dual-track anti-corruption system. Later, three pilot areas changed to a single anti-corruption bureau. The central commission for discipline inspection has absorbed the anti-corruption power of procurator organs and become the only anti-corruption agency. The influence of the party’s local leaders in fighting corruption has plummeted. Rather than giving up control or advancing the rule of law, the CCP central committee has accelerated actions to keep authority within the new system.

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Corruption and anti-corruption work in China and India  235

REFORMS AND LIMITATIONS IN INDIA Modi’s Rule Narendra Modi, the current prime minister of India, has held office since 2014. He served as the chief minister of Gujarat for 13 years before he became the country’s leader. After he took office, Modi has reformed and challenged the anti-corruption system in India. The most significant reform in the anti-corruption system has been the economic method called demonetisation. In November 2016, the Indian government announced the demonetisation decision to replace 500 and 1,000 banknotes to the new 500 and 2,000 rupee banknotes. Although this method was helpful to return a part of the funds, ordinary people suffered because of the poor organisation of exchange points and many of them eventually became victims. Thus, from the public reaction, the demonetisation method was not kind to the residents. Anti-Corruption Act Offshore transactions may be associated with corruption in India. Mauritius ranks first in the list of international investors in the Indian economy. Singapore ranks second, followed by the United Kingdom, Japan, Germany and the United States. This reflects the fact that Mauritius, along with Singapore, plays an offshore role for Indian companies. According to some estimates, the amount of offshore Indian capital ranges from $100 billion to $150 billion. Due to this, the country has been discussing whether to introduce measures to stop this process, since it is to a certain extent destructive for the Indian national economy, as large sums of money flow away without bringing benefits to the state. However, corruption in India arose quite a long time ago. It existed in the pre-colonial period and subsequently flourished in the colonial era. Nonetheless, at that time it was perceived as a kind of characteristic feature inherent in the system that developed in the colony. Many British henchmen from among the local elite, who were responsible for maintaining law and order as well as collecting taxes, could charge a kind of “commission” or “food” in order to accept “gifts” called “gave”. Most of the colonial authorities believed that corruption was a permanent component of Eastern society in general and in India in particular. The first coordinated steps to fight corruption were taken in the late 1930s when the British still dominated India. The Indian National Congress (INC) opposed the democratic principles proclaimed by it to the “corrupt system of colonial despotism”. Since 1941, the government has put in operation a special police unit designed to resist acts of corruption. In March 1947, the Indian government passed the anti-corruption act, The Prevention of Corruption Act. The document was intended to “clean up” the administration and became the basis for the emergence of protest movements focused on the fight against corruption. Leading Control and Period of Development In 1947 India gained independence from British rule. The free state took control of the system that had been formed over the years in the colonial era. Independence did not bring relief from the problems inherent in colonial India, and some problems even worsened. “Corruption in

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236  Handbook on corruption, ethics and integrity in public administration India is thousands of years old, but it has changed a lot. Over the past 20 years, there has been a transition to large-scale corruption: we have never met with scandals of the scale and size that we have had to deal with lately.” The reason for this is the dynamic development of India. Rapid growth has given new opportunities for illegal profits. Anti-Corruption Development An important feature of the Indian economy during independence was the licensing system. Its essence lay in the fact that any action related to the purchase of raw materials, equipment, opening branches or expanding a company required a license. This was done in order to limit the monopolisation of industries and protect national production. In addition, it was supposed to help to preserve the foreign currency necessary to pay for imports. After the implementation of the licensing system, the purchases process was often delayed for a long time. Production was slowed down, and there was hardly any opportunity for companies to develop. The Council on Foreign Affairs stated: “the institution of licenses and permits has become a source of corruption on a massive scale”. Policies have been aimed at restricting the inflow of foreign capital, imported goods, a ban on the export of Indian investments, and consequently, restriction of competition from foreign companies to support the national industry. All this, despite many positive results, also created many barriers for enterprising Indians. Indians began to resort to semi-legal and illegal methods of capital export in pursuit of greater profits and seek opportunities to invest in production abroad. The flight of capital has arisen. According to Dooley (1988, p. 422), “flight capital is defined as the stock of claims on nonresidents that do not generate investment income receipts in the creditor country’s balance of payments data”. When comparing this period with the colonial era, Indian economists call the current time as the time of “dominion of licenses” by analogy with the British dominion. A former correspondent for the Indian Times newspaper, Anita Pratap noted that from the 1970s the state did not deal with the problem of corruption seriously. Since the authorities themselves won at its expense, India lost huge funds that could have been invested in the development of the country. In the 1980s a corruption scandal broke out. The Swedish arms company, Bofors, was signing a trade agreement in India. The government of Rajiv Gandhi was paid huge bribes by many Indian and foreign companies. The opposition of the INC accused leading Congressional leaders Rajiv and Sonya Gandhi of participating in this corrupt deal. As a result, the INC lost the election in 1989. From the early 1990s, the economy in India gradually began to “open up to the world”, which provided new opportunities for deceptive schemes and mechanisms, and the number of scandalous court cases increased. Privatisation and public–private partnerships widely spread in many areas of business and immediately became objects of corruption. In 2008, there was a scandal with telecommunications companies (Yardley & Timmons, 2010). In 2012, the Indian Supreme Court revoked 122 licenses belonging to only eight companies. As a result, the minister of telecommunications was put in prison. However, many experts argue that the mechanisms for monitoring the implementation of anti-corruption schemes are not enough. Over recent years, only 25 civil servants have been checked for corruption, but no one has lost their post. Soon after the telecommunications case (2008–12) and Commonwealth Games scam (2010), a “Coalgate” scandal (2012) broke out that revealed the negative aspects of the Indian

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Corruption and anti-corruption work in China and India  237 economy and political system. It resulted in mass protests in Delhi and affected Prime Minister Manmohan Singh. It turned out that some representatives of the business community, as well as politicians who had contacts in the government, had illegally managed to obtain the right to develop still undeveloped coal deposits. Manmohan Singh held this post until 2014 and was then replaced by Bharatiya Janata Party leader Narendra Modi. Consequently, Modi became the head of government during the time of the fight against corruption and this became one of his major goals in politics.

ANTI-CORRUPTION STRATEGY China The anti-corruption strategies in China are divided into different dimensions. Mitigating corruption through legislation could be the way to diminish corruption levels. For instance, if the laws are more specific and authoritative, they will help to reduce the perception of official corruption. Besides the laws, which could punish corrupted officials, there should be other regulations to restrict some behaviours that may cause corruption. For example, one of the effective methods could be to make it obligatory for government officials to register their assets and hold corrupt officials accountable. The most necessary change for the government is to become open to the public. For corruption that happens in the administration, the way to minimise corruption levels would be to oversee government power and to set up a series of departments to monitor officials’ behaviours. It is important to ensure that the department is independent enough. For instance, the collusion between the judicial departments and local officials has led to judicial injustice. Corrupted officials must be severely punished and deprived of judicial qualification for life and unable to be employed anywhere in the public sector. What is more, a special constitutional maintenance body should be set up to oversee the impartiality of law enforcement in judicial departments and the integrity of government officials at all levels. Side effects and challenges When the government spends a lot of power and time focusing on handling the corruption problem, it leads to the formation of new groups of interest, distracting the national attention from other domestic issues. Often the ways used to expose much of the anti-corruption work to the general public have only created side effects. For example, the legitimate rights of corrupt officials during the sentencing process may be jeopardised. Excessive and high-pressure anti-corruption has led to government inaction and a brain drain. Taking the lead of the discipline inspection commission, a Party organisation, which is not a neutral, independent institution, would lead to the dictatorship of the Party and undermine the rule of law. Other challenges would be passive acts of the government and public officials. Due to strong pressure from the superiors on fighting corruption, public officials may lose working enthusiasm. In addition, lower-level officials may have a countermeasure to supervision during inspections and not perform to their best capacity.

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238  Handbook on corruption, ethics and integrity in public administration Possible anti-corruption reform campaigns Besides the institutional/legal reform, the grassroots and government departments require more attention. There is a clear need to strengthen the party’s unified leadership over party conduct, integrity and anti-corruption work. It is also important to reform the party’s system for disciplining the wrongdoers, and improve the party’s leadership and working mechanisms against corruption. Its content can be summarised as “two responsibilities” (liangge zeren) and “two mains” (liangge weizhu). “Two responsibilities” refers to the implementation of the responsibility system for building a clean and honest government by the party organisations (CCP) at different levels; in the meantime, commissions for discipline inspection are in charge of anti-corruption at all levels of the party-state apparatus. “Two mains” means that corruption cases should be investigated and dealt with mainly by the leaders of the discipline inspection commission at a higher level than the assumed corruption case. The handling of clues and case investigation must be reported to the discipline inspection commission at the higher level while being reported to the Party committee at the same level (Sun, 2019, p. 195). The prevention of corruption The first significant change is increased transparency and stricter anti-corruption activities. Xi first began his transparent and strict anti-corruption campaign soon after he took office in November 2012. Before Xi’s rule, the anti-corruption work within the party seemed not to be open to the public as it was mostly done through internal decisions. However, when Xi became the CCP leader, the most significant change in fighting corruption was not just finding and punishing party officials but that whole scandals were exposed, including the details and participating people. Consequently, transparency is one of the most significant changes in the anti-corruption methods used in China. This indirectly shows the determination and tough methods of the party in fighting corruption. Another visible change in the follow-up scandals was that the Chinese officials were banned from using luxury cars, announced by Xi in a Party Central Committee meeting in December 2012. Officials were also advised to be less ceremonious and not to give in to the old customs and habits. The second significant change in the anti-corruption work is to reduce the lavish behavior of public officials. Besides the officials in the party this also includes leaders in other areas such as state-owned enterprises like China National Petroleum Corporation. India Parliament and outside views Many people remember the riots in the Indian Parliament in 2011 after the notorious Wikileaks website published information that a few parliamentarians received significant amounts of money. During the vote of confidence in 2008, they cast their votes in support of the government. Even though Congress lost the support of its centre-left, the results of the elections were favourable for the government. Many accused Congress of bribing members of parliament, but the INC rejected everything. As a result of the investigation, two parliamentarians were arrested, whose involvement in the abuse was proved. Another corruption scandal ensued: the chief minister of the state of Maharashtra, Ashok Chavan, was forced to resign in 2011. He was charged with changing the housing that was intended for military widows to a property for the relatives of high-ranking military officers

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Corruption and anti-corruption work in China and India  239 and officials. Chavan and two of his accomplices were convicted for organising the criminal conspiracy, fraud and falsification of documents. In 2011, the anti-corruption movement intensified markedly. It was initiated by 74-year-old Anna Hazare, an Indian public figure who several times organised hunger strikes in the centre of Delhi to force the government to adopt a package of anti-corruption laws. Corruption, in the opinion of Anna Hazare, who was often called the “new Gandhi”, became the main social disease in India, and it was necessary to fight it “to the end”. Supporters of this movement demanded the creation of a special anti-corruption agency. An attempt to arrest an activist turned into a powerful wave of protests across the country; demonstrations in support of Anna Hazare took place in almost every major city, and the authorities were forced to cancel the arrest. The government announced that a committee would be set up to draft a bill. In December 2013, a new law was approved by parliament. In March 2012, army commander general V. K. Singh reported that he was offered a bribe of over $2 million by a person closely associated with the defence industry. In exchange the army had to buy several hundred trucks. This message provoked strong indignation in parliament, and the minister of defence, A. K. Anthony, promised to investigate. However, due to the lack of a written statement from the general, an official case was never opened. In recent years, political parties have used anti-corruption slogans as a powerful tool to attract the electorate. The Aam Aadmi Party built their program on the anti-corruption struggle, which greatly increased its popularity among the population. In 2013, in the elections to the Delhi Legislative Assembly, the Aam Aadmi Party won almost a third of the votes, beating the INC and losing only to the Bharatiya Janata Party. The leader of the Aam Aadmi Party became the chief minister of the capital. At the beginning of 2014 in a speech to the representatives of his party, Arvind Kejwiral accused about 20 high-ranking politicians of corruption. Among them were the leader of the Congress, Rahul Gandhi, and the Bharatiya Janata Party leader, Narendra Modi, who had not yet become prime minister but was the chief minister of the state of Gujarat. Thus, the fight against corruption turned into a political game for power. According to Kejwiral, a list of corrupt officials was compiled in order to let Indians know who should not be elected to parliament. The head of the Aam Aadmi Party said that “one of the main tasks of the party is to prevent any corrupt official from entering the parliament”. However, in the winter of 2014, an anti-corruption bill was rejected in parliament by two leading parties, since Congress and the Bharatiya Janata Party considered unconstitutional its adoption in the absence of an agreement with the federal government. After the rejection of the bill, which proposed the creation of an independent body with the authority to verify political and civil servants suspected of corruption, Arvind Kejwiral left his post in protest. There have been other attempts to combat corruption in India at different times. In 2005, the government authorised the emergence of a law on the right to information, according to which Indian citizens were able to request access to any document of a public nature, including documents that gave rise to suspicions of corrupt practices. Anti-corruption legislation was tightened and the work of the judiciary became more effective. The fight against corruption is conducted at the level of individual cities and states. Accordingly, a program was adopted to teach literacy to city residents with the help of volunteers in the city of Kottayam, Kerala, in 1988. Since this action was carried out without any external financing, only thanks to the personal aspirations of individuals, corruption was avoided. By June 1989, Kottayam became the first city in India where the literacy rate reached

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240  Handbook on corruption, ethics and integrity in public administration 100 per cent. In Bihar, the number of police officers was increased, trials began to be carried out faster. In Chhattisgarh, in 2003, a unique grain distribution system was introduced, which helped get rid of corruption in this important endeavour. This system has been recognised by the World Bank as the best in the world.

CONCLUSION Corruption is still a definite threat to two of the world’s largest economies, China and India. This is certainly not a new issue; rather, it has very deep roots in both countries. It is no exaggeration to say that corruption is widespread in India where it has become a part of everyday life for most Indians. In China, although the Xi Jinping regime launched the largest anti-corruption campaign in recent decades, anti-corruption remains a daunting task. Corruption is like a creeping cancer which can have many negative consequences. For instance, it can have a huge impact on not just public trust in government, but also the economic development of the nation. In view of the real and potential risks of corruption that could hurt the country, the fight against corruption has been on the agenda of both countries for years. Corruption is still ongoing in both countries, although there have been some signs of improvement. Nevertheless, under the current leaders of both nations, Xi Jinping and Narendra Modi, anti-corruption has been a defining feature of China and India’s attempts of reforming their political and administrative systems. Xi demanded newspapers, televisions and radio stations be loyal to the government. There is a clear use of technology for unlawful arrests, local investigations and creating uncertainty and fear among officials in all dimensions. This has led to a situation where officials have to be careful of controlling excessive behaviour and pausing to think before they are too immersed in illegal business. In addition, it is important to have a clear view of senior management, while the party controls key delegation instruments; there should not be any ambiguity or doubt in business and politics. Therefore, it is necessary to find a balance between justice and efficiency. During the period of the large-scale anti-corruption campaign, which began with the term of Xi Jinping, over 1.5 million members of the Communist Party were punished for violations. Despite significant achievements, the situation is extremely difficult, and the tasks are complex. The environment that generates corruption still exists and the problems in various departments have not disappeared. Formalism and bureaucracy are some of the obstacles still to be solved. The fight against corruption in China will become increasingly large scale and this will help to fulfil the “Chinese dream” and revive the Chinese nation. Indian prime minister Narendra Modi won the support of many voters, promising to solve two acute problems of the country – corruption and slow economic growth. Since the beginning of 2016 GDP growth rates have declined and in the second quarter of 2017 fell to 5.7 per cent (they previously reached 7 per cent), the lowest level in three years. According to some experts, Modi’s two ambitious goals are incompatible: an anti-corruption campaign hinders economic growth. The Indian and international expert community still cannot give a clear assessment of the anti-corruption policy of Narendra Modi. On the one hand, a rational gain is undoubtedly present in his strategy aimed at the withdrawal of funds illegally received by corrupt officials. However, on the other hand, ordinary Indians, traditionally inclined to distrust their savings to banks and keep them at home, have suffered significant damage. If we consider only the influence of Narendra Modi’s policy on the situation with corruption in the

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Corruption and anti-corruption work in China and India  241 country, then referring again to the data of Transparency International we can see that the corruption perception index in 2017 increased by two points compared to 2016. It indicates minor, but still positive, developments in addressing the problem of corruption in India. Although the anti-corruption movement still provides Modi with political support, economists say this must be traded off for lowering entrepreneurial and consumer confidence. This is one of the reasons why private investments are not growing, which in the past have ensured the acceleration of the economy. The problem of corruption has not lost its relevance for a long time in India. According to experts, one of the reasons for the poor effectiveness of the fight against corruption is the lack of legal literacy of the population. There are no anti-corruption educational programmes in Indian schools. Law schools and universities study anti-corruption legislation, as well as law enforcement practice, mainly in the framework of training courses on social and economic offences, or on white-collar crimes, or in the framework of the criminal procedure code, but not as separate courses. In order to create effective mechanisms for solving the problem, in 2010 the Central Supervision Commission prepared a draft National Anti-Corruption Strategy. This document emphasises the importance of the role of appropriate education in preventing corruption and forming intolerance to bribery among the population. The importance of the Law on the Right to Information as an anti-corruption tool is emphasised, recommendations have been made to develop education and public awareness programs, including courses on the study of this law in school and college curricula, and a working group has been established to revise educational curricula. Although Xi Jinping’s anti-corruption campaign is visible, China also needs to enhance anti-corruption education, which could address the fundamental issue of the corruption which is embedded in people’s daily lives.

REFERENCES Aranha, V. (2018). The evolution of education and innovation in India, 7 September. Retrieved from www​.entrepreneur​.com/​article/​319725 on 7 April 2020. Baculinao, E. (2018). China’s President Xi beefs up his anti-corruption crackdown. NBC News, 27 February. Retrieved from www​.nbcnews​.com/​news/​china/​china​-s​-president​-xi​-beefs​-his​-anti​ -corruption​-crackdown​-n851491 on 7 April 2020. BBC News (2018). Interpol chief Meng Hongwei vanishes on trip to China. BBC News, 5 October. Retrieved from www​.bbc​.com/​news/​world​-europe​-45761466 on 7 April 2020. Bhagwati, J. N. (2004). In Defence of Globalization. New York: Oxford University Press. Brown, K. (2018). The anti-corruption struggle in Xi Jinping’s China: An alternative political narrative. Asian Affairs, 49(1), 1–10. Commonwealth Games (2010). Retrieved https://​www​.telegraph​.co​.uk/​sport/​othersports/​ commonwealthgames/​8683996/​Commonwealth​-Games​-2010​-costs​-ballooned​-to​-over​-4bn​.html Dooley, M. P. (1988). Capital flight: A response to differences in financial risks. IMF Staff Papers, 35(3), 422–36. Global Financial Integrity (2015). Illicit financial flows from developing countries: 2004–2013. Retrieved from https://​secureservercdn​.net/​45​.40​.149​.159/​34n​.8bd​.myftpupload​.com/​wp​-content/​ uploads/​2015/​12/​IFF​-Update​_2015​-Final​-1​.pdf on 25 April 2020. Gong, T. (2015). Managing government integrity under hierarchy: Anti-corruption efforts in local China. Journal of Contemporary China, 24(94), 684–700. Gong, T. & Wu, A. M. (2012). Does increased civil service pay deter corruption? Evidence from China. Review of Public Personnel Administration, 32(2), 192–204. Graycar, A. & Villa, D. (2011). The loss of governance capacity through corruption. Governance: An International Journal of Policy, Administration, and Institutions, 24(3), 419–38.

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242  Handbook on corruption, ethics and integrity in public administration Hewitt, H. (2019). Playing the “long game” with China. Washington Post, 8 September. Retrieved from www​.washingtonpost​.com/​opinions/​2019/​09/​07/​playing​-long​-game​-with​-china/​ on 7 April 2020. Ko, K. & Weng, C. (2012). Structural changes in Chinese corruption. The China Quarterly, 211, 718–40. Laing, J. (2014). Why Beijing’s troubles could get a lot worse. Barron’s, 6 December. Retrieved from www​.barrons​.com/​articles/​anne​-stevenson​-yang​-why​-xi​-jinpings​-troubles​-and​-chinas​-could​-get​ -worse​-1417846773 on 7 April 2020. PTI (2019). China formally arrests Interpol’s former chief for corruption. Eastern Mirror, 24 April. Retrieved from www​.easternmirrornagaland​.com/​china​-formally​-arrests​-interpols​-former​-chief​-for​ -corruption/​on 7 April 2020. Reuters (2019a). China to prosecute top-ranking Uighur official for corruption. Reuters, 19 March. Retrieved from https://​es​.reuters​.com/​article/​worldNews/​idUSKCN1QX0BU on 7 April 2020. Reuters (2019b). China’s Xi says military must resist “corrosion” of corruption. Reuters, 19 August. Retrieved from www​.reuters​.com/​article/​us​-china​-politics​-defence/​chinas​-xi​-says​-military​-must​ -resist​-corrosion​-of​-corruption​-idUSKCN1L40D7 on 7 April 2020. Slonskaya, M. S. (2015). Korrupciia v Indii, mashtabi I metody borbi s nei (Corruption in India, scope and methods of combating it). Asia and Africa Today, 7, 28–33. Sun, C. (2019). Incessantly innovating and improving the system of power operation restrictions and supervision. In Fang, H. Chen & J. Yun (Eds.), Chinese dream and practice in Zhejiang–Politics. Singapore: Springer, pp. 179–98. The World Bank (2010). Corruption Hunters Rally for Action Against Fraud. Retrieved from https://​ www​.worldbank​.org/​en/​news/​feature/​2010/​12/​06/​corruption​-hunters​-rally​-for​-action​-against​-fraud​ .print The World Bank (2019). The World Bank In India. Retrieved from https://​www​.worldbank​.org/​en/​ country/​india/​overview Vyas, L. & Wu, A. M. (2020). Anti-corruption policy: China’s tiger hunt and India’s demonetization. International Journal of Public Administration, doi:​10​.1080/​01900692​.2020​.1739071 Wedeman, A. (2013). The dark side of business with Chinese characteristics. Social Research: An International Quarterly, 80(4), 1213–36. World Economic Forum (2013). The global competitiveness report 2013–2014: Full data edition. Retrieved from www3​.weforum​.org/​docs/​WEF​_GlobalCompetitivenessReport​_2013​-14​.pdf on 25 April 2020. Yardley, J. & Timmons, H. (2010). Telecom scandal plunges India into a political crisis. New York Times, 13 December. Zheng, W. (2019a). No let-up for corrupt “tigers” in 2018 as China’s graft-busters claim more big scalps. South China Morning Post, 1 January. Retrieved from www​.scmp​.com/​news/​china/​politics/​article/​ 2180294/​no​-let​-corrupt​-tigers​-2018​-chinas​-graft​-busters​-claim​-more​-big on 7 April 2020. Zheng, W. (2019b). China corruption watchdog’s big catch Zhao Zhengyong linked to string of scandals. South China Morning Post, 16 January. Retrieved from www​.scmp​.com/​news/​china/​politics/​article/​ 2182398/​big​-catch​-china​-corruption​-watchdog​-zhao​-zhengyong​-linked​-string on 7 April 2020. Zheng, W. (2019c). Chinese ex-Interpol president Meng Hongwei expelled from Communist Party. South China Morning Post, 27 March. Retrieved from www​.scmp​.com/​news/​china/​politics/​article/​ 3003483/​chinese​-ex​-interpol​-president​-meng​-hongwei​-expelled​-communist on 7 April 2020.

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18. Corruption in Lithuania: between institutions and perceptions Eglė Butkevičienė, Eglė Vaidelytė and Vaidas Morkevičius

INTRODUCTION Corruption as a phenomenon manifests a complex nature which is highly dependent on cultural context. It is widely discussed that Lithuania as a Central and Eastern European country still experiences difficult moral legacies from the 50 years of Soviet occupation and is very susceptible to different forms of corruption. Even today, the cliché that Lithuania is a highly corrupt country often occurs in public perceptions as well as public and media discourse. However, institutional indices on corruption and integrity reflect a much brighter view of Lithuania in the context of corruption. According to the Corruption Perception Index (CPI), the Index of Public Integrity, and Democracy Barometer, Lithuania has relatively high rates of transparency in comparison with other countries in the world, and usually appears above many other post-communist and even Western countries. Moreover, it should be noted that other post-Soviet countries with lower positions in the aforementioned indices manifest higher citizen satisfaction with corruption levels in their countries and government capacity to control it. What are the reasons for this cleavage between public opinion and expert evaluations of institutional settings? This chapter presents the case of Lithuania in the context of corruption and its prevention. It includes analysis of quantitative and qualitative data as well as an historical review of social and political settings in Lithuania. The chapter starts with an overview of the history and the current public administration system in Lithuania that has experienced many reforms and changes, especially since the early 1990s when Lithuania restored its independence and faced a challenge to create a new public governance system based on Western values. It also stresses that Lithuania still experiences many unfavourable moral and institutional legacies from the Soviet period which have influence on public perceptions of corruption as well as on public governance practices. Further, the chapter presents positive trends of integrity and transparency in Lithuania indicated by institutional measurements and an interview with the executive officer of the Lithuanian anti-corruption agency. Based on the quantitative survey data, we note that public perceptions of corruption describe Lithuania as a quite corrupt country and try to explain these rather negative views exposing the relationship between corruption perceptions and political trust and political efficacy. In the final part of the chapter we describe the corruption prevention system in Lithuania and provide conclusions and a general outlook of the corruption and its prevention system in Lithuania.

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THE PUBLIC ADMINISTRATION SYSTEM IN LITHUANIA: BRIEF OVERVIEW The current public administration system in Lithuania has inherited legacies of several historical periods. While the most important influence has been exerted by the Soviet period, the administrative practices of Tsarist Russia, to which Lithuania belonged in the nineteenth century, and the short period of independence between the two world wars have also left some imprints (Pivoras, 2013). After establishing its independence in 1918, Lithuania introduced a Weberian type of public administration system which was, at that time, the dominant trend in Western democracies. This system “with a strong emphasis on professionalism, hierarchy, and the regulation of the civil service according to public law” (Pivoras, 2013, p. 137), with some minor modifications, prevailed in Lithuania until the Second World War. During the Second World War, Lithuania was occupied by the Soviet Union and remained incorporated in the Soviet administrative system for almost 50 years (until 1990). The character of the Soviet administrative system was well known for its double standards. On the one hand, it was characterized by “an excessively hierarchical and legalistic nature” (Nakrošis, 2003, p. 126), where “officials under the old system tended to be more concerned with carrying out orders and less concerned with the outcomes of their activities” (Barr, Gomulka, and Tomes, 1994, p. 105). On the other hand, a very important part of Soviet public bureaucracy was nomenklatura and “the formal rules could easily be changed according to the wishes of top nomenklatura officials and as a result, administrative voluntarism behind the mask of formal legalism was a reality” (Pivoras, 2013, p. 139). Thus, while in the rest of the world public administration was shifting from Weberian bureaucracy towards new public administration and later towards new public management, the Soviet-occupied area of Europe had to deal with a public sector dominated by hierarchical legalistic practices coexisting with the nomenklatura networks and widespread corruptive practices (bribes, nepotism, favouritism, patronage, etc.). In the last decade of the twentieth century, Lithuania restored its independence and started to reform the existing public administration system. Baimenov and Liebert (2019) argue that the newly independent states that   once made up the Soviet Union were faced with the herculean challenge of reforming existing governance structures to enable them to develop their collapsing economies and effectively deliver services to their people. At that time, public administration in Western countries experienced the rise of new public governance, while the Lithuanian public administration system was undergoing major transformations, as well as fighting with the Soviet legacies related to informal practices, high levels of corruption, and distrust in the public sector. The first decade of independence was marked by weak public institutions and an ineffective civil service. However, during that time, major legislative documents regulating public service were adopted, including the Law on Public Administration passed in 1999. The newly developed public administration system was still quite hierarchical and legalistic. As emphasized by Nakrošis (2018, p. 676): Public administration in Lithuania is very much legalistic and follows the “Rechtstaat” tradition. Policy making is understood primarily as the preparation and adoption of legal acts, with particular attention to legal drafting techniques… Legalism permeates to the civil service where laws delineate the duties and responsibilities of civil servants, effectively limiting their discretion. Besides, politi-

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Corruption in Lithuania  245 cians are sometimes unwilling to delegate tasks to civil servants in order to safeguard their political power.

However, during the preparatory period for the accession to the European Union (EU), a number of new public management-type managerial instruments were introduced, which are still prevalent on the government agenda (Nakrošis, 2018). Currently, the central administration of Lithuania consists of several types of institutions accountable to (a) the government and separate ministries, (b) the parliament, and (c) the president of Lithuania. There are 14 ministries in Lithuania with a focus on specific policy areas and considerably unified administrative structures within each ministry. The primary coordination body of the centre of government is the Office of Government, which is led by the chancellor of the government, who is appointed by the prime minister and is a civil servant of political confidence (Nakrošis, 2018, p.  669). Its main functions are strategic planning, monitoring and evaluation. This important public-sector organization role is also played by the state-owned enterprises that provide numerous public services. Below the central-level institutions, Lithuania also has 60 municipalities, that “de jure possess the power to act in an autonomous way within their competence areas, but a lack of fiscal capacity constrains their room for manoeuvre” (Nakrošis, 2018, p.  667). As emphasized by Nakrošis (2018), although municipalities have their own budgets, a large share of them comes from the central government, resulting in a low level of fiscal decentralization. Municipality competence areas include education, territorial and urban planning, social welfare, and public services. In Lithuania, public-sector employees in leading positions are also of two types: executives and civil servants of political (personal) confidence; e.g. at municipality level, mayors and members of municipal councils are elected every four years. However, the director of a municipal administration takes an executive role. At the central level, each ministry has a minister, vice-ministers, a chancellor, and some advisers to the minister. All of them are civil servants of political (personal) confidence. On the other hand, the heads of departments or divisions and their deputies are mostly on executive contracts.

PUBLIC-SECTOR INTEGRITY AND LEVELS OF CORRUPTION IN LITHUANIA Various international corruption and integrity indices reveal general trends of public-sector integrity and levels of corruption in Lithuania. Importantly, they are deemed to be more objective and free from social stereotypes and subjective opinions. According to the 2019 CPI, which “ranks 180 countries and territories by their perceived levels of public sector corruption according to experts and businesspeople” (www​.transparency​.org/​cpi2019), Lithuania had a score of 59 points and was ranked 35th position among the 180 countries in the world (Transparency International, 2020). For the last few years Lithuania has held stable on the CPI, which indicates a relatively high level of transparency compared to 1999, when Lithuania’s score was just 38 points out of 100 (Transparency International, 1999). Lithuania demonstrates a similar score if compared to the neighbouring EU countries having common historical roots of public administration. Latvia is ranked 44th, Poland 41st, and Estonia 18th out of 180 countries (Transparency International, 2020).

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246  Handbook on corruption, ethics and integrity in public administration Also, according to the Index of Public Integrity, which is a composite index consisting of six components – judicial independence, administrative burden, trade openness, budget transparency, e-citizenship, and freedom of press – Lithuania in 2017 was ranked 23rd out of 30 countries in the EU, Norway and United States regions. Meanwhile, Estonia is in 8th place, and Latvia is at 21st place on the same scale. However, taking each criterion separately, Lithuania appears in different positions. On both e-citizenship and trade openness, Lithuania holds the 20th place out of 30 countries; according to freedom of press, Lithuania is in the middle of the scale (ranked 15th out of 30), and according to administrative burden, Lithuania is above average (ranked 13th out of 30). According to juridical independence, Lithuania is ranked 19th, but according to budget transparency, Lithuania is in the last position in the region (https://​integrity​-index​.org). Low budget transparency indicates that citizens are not active in conventional local government decision-making processes. According to the Corruption Absence Index produced by the Democracy Barometer project (Merkel et al., 2018), which consists of the CPI (produced by Transparency International) and the Corruption Index (developed by International Country Risk Guide), in 2016 Lithuania was 26th out of 47 countries, and had a score of 39.5 on a scale from 0 to 100. Lithuania is above such EU countries as Greece, Italy, Bulgaria, Romania, Hungary, Croatia, Slovakia, Czech Republic, Latvia, Malta, and Spain. The leading seven countries according to these statistics are the Nordic countries, New Zealand, and the Netherlands. Finally, according to the Control of Corruption Index, which “captures perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ the state by elites and private interests”, included into the Worldwide Governance Indicators database published by the World Bank (Kaufmann and Kraay, 2019), Lithuania holds the 63rd position, Latvia the 64th, and Estonia the 28th position among 209 countries (https://​info​.worldbank​.org/​governance/​wgi). Thus, from an institutional perspective, the general situation of corruption in Lithuania is relatively positive. However, there are many legacies related to historically determined socio-cultural and political contexts. The executive-level official of the Lithuanian Special Investigation Service (SIS) in an interview1 revealed that the significant feature of corruption in Lithuania is routine bribing: “the petty corruption in the form of bribes is very popular… first of all, in healthcare system”. According to the Lithuanian Corruption Map developed by SIS (www​.stt​.lt/​en), the Ministry of Health is identified as one of the most corrupt institutions in Lithuania (55% of respondents in 2014 and 47% citizens in 2019 think that it is highly corrupt, see Specialiųjų tyrimų tarnyba, 2019). At first glance, it might be assumed that the key issue in this situation is the low salaries of medical staff in comparison with salaries in the same field in Western countries. As noted by the SIS official, “a surgeon of highest competence receives 1000 euros monthly officially and earns 5000 euros per month from bribes paid for surgeries”. However, the cultural mentality plays more than a minor role in explaining the situation. The interviewee claimed that there is still distinctive thinking as a legacy from the Soviet period, whereby citizens are convinced that in order to obtain better quality of medical services, it is essential to give a bribe to a doctor: “in Soviet times and the early post-Soviet period, the culture of bribery as an instrument of negotiation was formed and culturally embedded in social interaction in this field of services”. Nowadays, the institutions of the Lithuanian healthcare system are highly regarded in Europe, and primary healthcare reflects best Organisation for Economic Co-operation and Development practices (OECD, 2018). The mentality and practice to give an under-the-table payment to a doctor as an expression of

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Corruption in Lithuania  247 gratitude is still very common. On the other hand, “nobody would give a bribe if it was known that a doctor was not going to take it” (the SIS official). The respondent emphasized that the lack of political will among medical doctors to promote zero tolerance to bribery is another central reason of corruption existence in the field of healthcare. The respondent discussed that the possible solution to make the situation more transparent could be the launch of a special foundation where citizens could voluntarily donate to a doctor as an expression of gratitude. In summary, we can see that institutional corruption measurements indicate that Lithuania is in the middle of the scale, or even above average, according to different corruption indices. Nevertheless, public perception about corruption in Lithuania appears to be more pessimistic and is presented in the next section.

PUBLIC PERCEPTIONS ABOUT CORRUPTION AND BRIBES IN LITHUANIA Public perception is one of the factors that shapes public discourse and gives birth to stereotypes and popular clichés. Public opinion surveys indicate that Lithuanians, more than other Europeans, tend to think that corruption is a major issue in the country and do not trust the government in the fight against corruption. According to data from the Lithuanian Corruption Map 2019, Lithuanians think that corruption is the fourth most important problem in Lithuania after such issues as low salaries, high prices/inflation, and emigration. This opinion varies in different groups of respondents: corruption as the most important problem is identified by 36 per cent of citizens, 32 per cent of businessmen, and 23 per cent of civil servants (Specialiųjų tyrimų tarnyba, 2019). Comparing the different public spheres, Lithuanian residents think that corruption is most widespread in the healthcare system (81.9%), among the politicians at all levels (61.4%), and public servants issuing building permits (61.1%) (Eurobarometer 88.2, 2017). Just over half of the respondents (52.4%) think that corruption is widespread in police and customs, while the education system and banks are seen as comparatively transparent as only 26.4 per cent and 17.5 per cent of the respondents indicated that corruption is widespread in these spheres. Lithuania is not unique in its high level of corruption perceptions, as following Eurobarometer 88.2 (2017), in most EU member states, citizens consider corruption to be very or fairly widespread in their countries (see Figure 18.1). There are only a few countries in Europe (and most of them are Nordic countries) where less than 50 per cent of citizens think that corruption is not very or fairly widespread in their country. Meanwhile, Lithuania is among those countries where absolute majority of citizens (95.7% of respondents) believe that corruption is very or fairly widespread in the country (see Figure 18.1). However, in most Central and Eastern European countries, almost every second respondent declares that it is acceptable to give money or a gift or do a favour in order to ensure that they get something from public administration/public service (Figure 18.2). As the data show, almost half of respondents in Lithuania (48.9%) think that it is acceptable to give money or a gift or do a favour to a representative of public administration in order to obtain public service. Besides that, Eurobarometer data confirm expert opinions discussed above, that tolerance to corruption is considerably higher when speaking about health and healthcare issues. Apparently, the healthcare system is one of the fields that manifests high levels of petty cor-

Eglė Butkevičienė, Eglė Vaidelytė and Vaidas Morkevičius - 9781789900910 Downloaded from Elgar Online at 08/05/2020 06:36:58PM via The University of British Columbia Library

248  Handbook on corruption, ethics and integrity in public administration

Source: Eurobarometer 88.2, 2017.

Figure 18.1

Evaluations of the spread of corruption in the country (literal question, QB5: How widespread do you think the problem of corruption is in (OUR COUNTRY)?)

ruption. In healthcare, moral decisions are directly related to survival needs, thus are full of moral intensity and are ethically very complicated. Also, according to the Eurobarometer 88.2 (2017) data, around 36.7 per cent of respondents indicated that corruption is widespread in the healthcare systems of their countries. However, country statistics range from as little as 5.8 per cent in Finland to as high as 82.5 per cent in Greece (see Figure 18.3). Habibov (2016), in his research, emphasized that corruption in post-Soviet healthcare systems “exists as a rampant issue”, and Figure 18.3 indicates that most Eastern European countries are among the countries where more than half of the respondents think that corruption is widespread in their healthcare systems. Usually, people follow a “tradition” to give an under-the-table payment for the service in healthcare systems, and petty corruption like backhanders or small presents in the healthcare system in some countries is often considered as a cultural norm (Wang-Sheng and Guven, 2013). According to the Global Corruption Barometer 2016 conducted by Transparency International, 24 per cent of Lithuanian respondents reported that they or their family members have given a bribe in the past 12 months. It is the second highest rate in the EU after Romania (29%). In comparison, the bribery rate in Latvia is 15 per cent and in Estonia it is as low as 5 per cent. However, citizens in Georgia and Belarus (countries ranked lower on various institutional corruption indices than Lithuania) are convinced that corruption is not the biggest

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Corruption in Lithuania  249

Source: Eurobarometer 88.2, 2017.

Figure 18.2

Tolerance towards bribes and favours in the public sector (literal question, QB4: Talking more generally, if you wanted to get something from public administration or a public service, to what extent do you think it is acceptable to do any of the following? Items: to give money; to give a gift; to do a favour)

problem in the country (Transparency International, 2016). Also, Azerbaijani citizens identify corruption as a medium risk in their country, although according to CPI in 2018, Azerbaijan was rated among the most corrupt countries in the world (152nd out of 180 countries). Apparently, in many cases, public perceptions of corruption and the institutional corruption indicators diverge significantly and this is the case for Lithuania. One possible explanation for this incongruence might be related to low trust and political efficacy that are direct expressions of the Soviet legacy (Boda and Medve-Bálint, 2014; Rose and Mishler, 2011). Considering internal political efficacy, as seen in Table 18.1, respondents in Lithuania score very low on this indicator, as only 20.2 per cent of respondents think that their voice counts in the country, while the average for EU countries is 60.1 per cent. More importantly, the evaluation of the spread of corruption is highly related to internal political efficacy as the percentage of people who think that their voice does not count is 20 percentage points higher among those who declare that corruption is very or fairly widespread in their country compared to those who think otherwise. Moreover, as the data in Table 18.2 show, the same relationship holds when people evaluate levels of corruption of both politicians and public officials.

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250  Handbook on corruption, ethics and integrity in public administration

Source: Eurobarometer 88.2, 2017.

Figure 18.3

Evaluation of the spread of corruption in the healthcare system (literal question, QB7: In (OUR COUNTRY), do you think that the exchanging of bribes and the abuse of power for personal gain are widespread among any of the following? Item: the healthcare system)

An even stronger relationship exists between political trust and corruption perceptions. As we see from Table 18.3, the level of trust in politicians and civil servants is very low in Lithuania. This low level of trust makes an impact on corruption perception. The percentage of respondents who do not trust politicians and civil servants is respectively 14.9 and 16.7 per cent higher among those who think that quite a lot or almost all politicians and public officials are involved in corruption compared to those who think otherwise. Table 18.1

Perception of corruption and political efficacy (Lithuania) How widespread the problem of corruption is in your country (%) No corruption at all or very/

My voice counts in my country

fairly rare

Very/fairly widespread

Total

Totally disagree

35.1

43.6

43.3

Tend to disagree

24.3

37.1

36.5

Tend to agree

35.1

18.2

18.9

Totally agree

5.4

1.1

1.3

Note: Spearman’s rho = -0.16, p