Wednesday, February 22, 2012

POLITICAL AND SOCIAL

Political corruption is the use of power by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by private persons or corporations not directly involved with the government. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties, is done under color of law or involves trading in influence.

Forms of corruption vary, but include bribery, extortion, cronyism, nepotism, patronage, graft, and embezzlement. Corruption may facilitate criminal enterprise such as drug trafficking, money laundering, and human trafficking, though is not restricted to these activities.

The activities that constitute illegal corruption differ depending on the country or jurisdiction. For instance, some political funding practices that are legal in one place may be illegal in another. In some cases, government officials have broad or ill-defined powers, which make it difficult to distinguish between legal and illegal actions. Worldwide, bribery alone is estimated to involve over 1 trillion US dollars annually. A state of unrestrained political corruption is known as a kleptocracy, literally meaning "rule by thieves".

Political corruption
Concepts

Bribery · Cronyism · Economics of corruption
Electoral fraud · Nepotism · Slush fund

Corruption by country

Angola · Armenia · Bahrain · Canada · Chile · China
Colombia · Cuba · Ghana · India · Indonesia · Iran
Ireland · Kenya · Kyrgyzstan · Nigeria · Pakistan
Paraguay · Philippines · Russia
South Africa · Ukraine · United States
Venezuela

This box:

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Effects on politics, administration, and institutions

Detail from Corrupt Legislation (1896) by Elihu Vedder. Library of Congress Thomas Jefferson Building, Washington, D.C.

Corruption poses a serious development challenge. In the political realm, it undermines democracy and good governance by flouting or even subverting formal processes. Corruption in elections and in legislative bodies reduces accountability and distorts representation in policymaking; corruption in the judiciary compromises the rule of law; and corruption in public administration results in the inefficient provision of services. It violates a basic principle of republicanism regarding the centrality of civic virtue. More generally, corruption erodes the institutional capacity of government as procedures are disregarded, resources are siphoned off, and public offices are bought and sold. At the same time, corruption undermines the legitimacy of government and such democratic values as trust and tolerance.

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Economic effects

See also: Corporate crime

In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cuttingbureaucracy, the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms.[2]

Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal or pave the way for such dealings, thus further distorting investment.[3] Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government.

Economists argue that one of the factors behind the differing economic development in Africa and Asia is that in Africa, corruption has primarily taken the form of rent extraction with the resultingfinancial capital moved overseas rather than invested at home (hence the stereotypical, but often accurate, image of African dictators having Swiss bank accounts). In Nigeria, for example, more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999.[4] University of Massachusetts researchers estimated that from 1970 to 1996, capital flight from 30 sub-Saharancountries totaled $187bn, exceeding those nations' external debts.[5] (The results, expressed in retarded or suppressed development, have been modeled in theory by economist Mancur Olson.) In the case of Africa, one of the factors for this behavior was political instability, and the fact that new governments often confiscated previous government's corruptly-obtained assets. This encouraged officials to stash their wealth abroad, out of reach of any future expropriation. In contrast, Asian administrations such as Suharto's New Order often took a cut on business transactions or provided conditions for development, through infrastructure investment, law and order, etc.

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Environmental and social effects

Corruption facilitates environmental destruction. Corrupt countries may formally have legislation to protect the environment, it cannot be enforced if officials can easily be bribed. The same applies to social rights worker protection, unionization prevention, and child labor. Violation of these laws rights enables corrupt countries to gain illegitimate economic advantage in the international market.

The Nobel Prize-winning economist Amartya Sen has observed that "there is no such thing as an apolitical food problem." While drought and other naturally occurring events may trigger famine conditions, it is government action or inaction that determines its severity, and often even whether or not a famine will occur. Governments with strong tendencies towards kleptocracy can underminefood security even when harvests are good. Officials often steal state property. In Bihar, India, more than 80% of the subsidized food aid to poor is stolen by corrupt officials. Similarly, food aid is often robbed at gunpoint by governments, criminals, and warlords alike, and sold for a profit. The 20th century is full of many examples of governments undermining the food security of their own nations – sometimes intentionally.

Effects on Humanitarian Aid

The scale of humanitarian aid to the poor and unstable regions of the world grows, but it is highly vulnerable to corruption, with food aid, construction and other highly valued assistance as the most at risk.[8] Food aid can be directly and physically diverted from its intended destination, or indirectly through the manipulation of assessments, targeting, registration and distributions to favour certain groups or individuals. Elsewhere, in construction and shelter, there are numerous opportunities for diversion and profit through substandard workmanship, kickbacks for contracts and favouritism in the provision of valuable shelter material. Thus while humanitarian aid agencies are usually most concerned about aid being diverted by including too many, recipients themselves are most concerned about exclusion. Access to aid may be limited to those with connections, to those who pay bribes or are forced to give sexual favours. Equally, those able to do so may manipulate statistics to inflate the number beneficiaries and syphon of the additional assistance.

Other areas: health, public safety, education, trade unions, etc. Police corruption

Corruption is not specific to poor, developing, or transition countries. In western countries, cases of bribery and other forms of corruption in all possible fields exist: under-the-table payments made to reputed surgeons by patients attempting to be on top of the list of forthcoming surgeries, bribes paid by suppliers to the automotive industry in order to sell low-quality connectors used for instance in safety equipment such as airbags, bribes paid by suppliers to manufacturers of defibrillators (to sell low-quality capacitors), contributions paid by wealthy parents to the "social and culture fund" of a prestigious university in exchange for it to accept their children, bribes paid to obtain diplomas, financial and other advantages granted to unionists by members of the executive board of a car manufacturer in exchange for employer-friendly positions and votes, etc. Examples are endless. These various manifestations of corruption can ultimately present a danger for the public health; they can discredit specific, essential institutions or social relationships.

Corruption can also affect the various components of sports activities (referees, players, medical and laboratory staff involved in anti-doping controls, members of national sport federation and international committees deciding about the allocation of contracts and competition places).

Cases exist against (members of) various types of non-profit and non-government organisations, as well as religious organisations.

Ultimately, the distinction between public and private sector corruption sometimes appears rather artificial and national anti-corruption initiatives may need to avoid legal and other loopholes in the coverage of the instruments.]

Bribery

Main article: Bribery

A bribe is a payment given personally to a government official in exchange of his use of official powers. Bribery requires two participants: one to give the bribe, and one to take it. Either may initiate the corrupt offering; for example, a customs official may demand bribes to let through allowed (or disallowed) goods, or a smuggler might offer bribes to gain passage. In some countries the culture of corruption extends to every aspect of public life, making it extremely difficult for individuals to stay in business without resorting to bribes. Bribes may be demanded in order for an official to do something he is already paid to do. They may also be demanded in order to bypass laws and regulations. In addition to using bribery for private financial gain, they are also used to intentionally and maliciously cause harm to another (i.e. no financial incentive). In some developing nations, up to half of the population has paid bribes during the past 12 months.[10]

In recent years, efforts have been made by the international community to encourage countries to dissociate and incriminate as separate offences, active and passive bribery. Active bribery can be defined for instance as the promising, offering or giving by any person, directly or indirectly, of any undue advantage [to any public official], for himself or herself or for anyone else, for him or her to act or refrain from acting in the exercise of his or her functions. (article 2 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe). Passive bribery can be defined as the request or receipt [by any public official], directly or indirectly, of any undue advantage, for himself or herself or for anyone else, or the acceptance of an offer or a promise of such an advantage, to act or refrain from acting in the exercise of his or her functions (article 3 of the Criminal Law Convention on Corruption (ETS 173)). The reason for this dissociation is to make the early steps (offering, promising, requesting an advantage) of a corrupt deal already an offence and, thus, to give a clear signal (from a criminal policy point of view) that bribery is not acceptable. Furthermore, such a dissociation makes the prosecution of bribery offences easier since it can be very difficult to prove that two parties (the bribe-giver and the bribe-taker) have formally agreed upon a corrupt deal. In addition, there is often no such formal deal but only a mutual understanding, for instance when it is common knowledge in a municipality that to obtain a building permit one has to pay a "fee" to the decision maker to obtain a favourable decision. A working definition of corruption is also provided as follows in article 3 of the Civil Law Convention on Corruption (ETS 174): For the purpose of this Convention, "corruption" means requesting, offering, giving or accepting, directly or indirectly, a bribe or any other undue advantage or prospect thereof, which distorts the proper performance of any duty or behavior required of the recipient of the bribe, the undue advantage or the prospect thereof.

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Trading in influence

Trading in influence, or influence peddling in some countries, refers to the situation where a person is selling his/her influence over the decision process involving a third party (person or institution). The difference with bribery is that this is a tri-lateral relation. From a legal point of view, the role of the third party (who is the target of the influence) does not really matter although he/she can be an accessory in some instances. It can be difficult to make a distinction between this form of corruption and some forms of extreme and loosely regulated lobbying where for instance law- or decision-makers can freely "sell" their vote, decision power or influence to those lobbyists who offer the highest compensation, including where for instance the latter act on behalf of powerful clients such as industrial groups who want to avoid the passing of specific environmental, social, or other regulations perceived as too stringent, etc. Where lobbying is (sufficiently) regulated, it becomes possible to provide for a distinctive criteria and to consider that trading in influence involves the use of "improper influence", as in article 12 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe.

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Patronage

Main article: Patronage

Patronage refers to favoring supporters, for example with government employment. This may be legitimate, as when a newly elected government changes the top officials in the administration in order to effectively implement its policy. It can be seen as corruption if this means that incompetent persons, as a payment for supporting the regime, are selected before more able ones. In nondemocracies many government officials are often selected for loyalty rather than ability. They may be almost exclusively selected from a particular group (for example, Sunni Arabs in Saddam Hussein's Iraq, thenomenklatura in the Soviet Union, or the Junkers in Imperial Germany) that support the regime in return for such favors. A similar problem can also be seen in Eastern Europe, for example in Romania, where the government is often accused of patronage (when a new government comes to power it rapidly changes most of the officials in the public sector).

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Nepotism and cronyism

Main articles: Nepotism and Cronyism

Favoring relatives (nepotism) or personal friends (cronyism) of an official is a form of illegitimate private gain. This may be combined with bribery, for example demanding that a business should employ arelative of an official controlling regulations affecting the business. The most extreme example is when the entire state is inherited, as in North Korea or Syria. A milder form of cronyism is a "Good ol' boy network", in which appointees to official positions are selected only from a closed and exclusive social network – such as the alumni of particular universities – instead of appointing the most competent candidate.

Seeking to harm enemies becomes corruption when official powers are illegitimately used as means to this end. For example, trumped-up charges are often brought up against journalists or writers who bring up politically sensitive issues, such as a politician's acceptance of bribes.

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Electoral fraud

Main article: Electoral fraud

Electoral fraud is illegal interference with the process of an election. Acts of fraud affect vote counts to bring about an election result, whether by increasing the vote share of the favored candidate, depressing the vote share of the rival candidates, or both. Also called voter fraud, the mechanisms involved include illegal voter registration, intimidation at polls, and improper vote counting.

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Embezzlement

Main article: Embezzlement

Embezzlement is outright theft of entrusted funds. It is political when it involves public money taken by a responsible public official. A common type of embezzlement is that of personal use of entrusted government resources; for example, when an official assigns public employees to renovate his own house.

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Kickbacks

See also: Anti-competitive practices and Bid rigging

A kickback is an official's share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. For example, suppose that a politician is in charge of choosing how to spend some public funds. He can give a contract to a company that is not the best bidder, or allocate more than they deserve. In this case, the company benefits, and in exchange for betraying the public, the official receives a kickback payment, which is a portion of the sum the company received. This sum itself may be all or a portion of the difference between the actual (inflated) payment to the company and the (lower) market-based price that would have been paid had the bidding been competitive. Kickbacks are not limited to government officials; any situation in which people are entrusted to spend funds that do not belong to them are susceptible to this kind of corruption.

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Unholy alliance

An unholy alliance is a coalition among seemingly antagonistic groups for ad hoc or hidden gain. Like patronage, unholy alliances are not necessarily illegal, but unlike patronage, by its deceptive nature and often great financial resources, an unholy alliance can be much more dangerous to the public interest. An early, well-known use of the term was by Theodore Roosevelt (TR):

"To destroy this invisible Government, to dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day." – 1912 Progressive PartyPlatform, attributed to TR[11] and quoted again in his autobiography[12] where he connects trusts and monopolies (sugar interests, Standard Oil, etc.) to Woodrow Wilson, Howard Taft, and consequently both major political parties.

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Involvement in organized crime

An illustrative example of official involvement in organized crime can be found from 1920s and 1930s Shanghai, where Huang Jinrong was a police chief in the French concession, while simultaneously being a gang boss and co-operating with Du Yuesheng, the local gang ringleader. The relationship kept the flow of profits from the gang's gambling dens, prostitution, and protection rackets undisturbed.

The United States accused Manuel Noriega's government in Panama of being a "narcokleptocracy", a corrupt government profiting on illegal drug trade. Later the U.S. invaded Panama and captured Noriega.

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Conditions favorable for corruption

This section is in a list format that may be better presented using prose. You can help by converting this section to prose, if appropriate.Editing help is available. (December 2009)

It is argued that the following conditions are favorable for corruption:

  • Information deficits
    • Lacking freedom of information legislation. For example: The Indian Right to Information Act 2005 is perceived to have "already engendered mass movements in the country that is bringing the lethargic, often corrupt bureaucracy to its knees and changing power equations completely."[13]
    • Lack of investigative reporting in the local media.
    • Contempt for or negligence of exercising freedom of speech and freedom of the press.
    • Weak accounting practices, including lack of timely financial management.
    • Lack of measurement of corruption. For example, using regular surveys of households and businesses in order to quantify the degree of perception of corruption in different parts of a nation or in different government institutions may increase awareness of corruption and create pressure to combat it. This will also enable an evaluation of the officials who are fighting corruption and the methods used.
    • Tax havens which tax their own citizens and companies but not those from other nations and refuse to disclose information necessary for foreign taxation. This enables large scale political corruption in the foreign nations.[14][citation needed]
  • Lacking control of the government.
  • Opportunities and incentives
    • Individual officials routinely handle cash, instead of handling payments by giro or on a separate cash desk—illegitimate withdrawals from supervised bank accounts are much more difficult to conceal.
    • Public funds are centralized rather than distributed. For example, if $1,000 is embezzled from a local agency that has $2,000 funds, it is easier to notice than from a national agency with $2,000,000 funds. See the principle of subsidiarity.
    • Large, unsupervised public investments.
    • Sale of state-owned property and privatization.[citation needed]
    • Poorly-paid government officials.
    • Government licenses needed to conduct business, e.g., import licenses, encourage bribing and kickbacks.
    • Long-time work in the same position may create relationships inside and outside the government which encourage and help conceal corruption and favoritism. Rotating government officials to different positions and geographic areas may help prevent this; for instance certain high rank officials in French government services (e.g. treasurer-paymasters general) must rotate every few years.
    • Costly political campaigns, with expenses exceeding normal sources of political funding, especially when funded with taxpayer money.
    • Less interaction with officials reduces the opportunities for corruption. For example, using the Internet for sending in required information, like applications and tax forms, and then processing this with automated computer systems. This may also speed up the processing and reduce unintentional human errors. See e-Government.
    • A windfall from exporting abundant natural resources may encourage corruption.[16] (See Resource curse)
    • War and other forms of conflict correlate with a breakdown of public security.
  • Social conditions

In the Indian political system, for example, it has become usual that the leadership of national and regional parties are passed from generation to generation[17][18] creating a system in which a family holds the center of power. Some examples are most of the Dravidian parties of south India and also the Congress party, which is one of the two major political parties in India.

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Size of public sector

Extensive and diverse public spending is, in itself, inherently at risk of cronyism, kickbacks, and embezzlement. Complicated regulations and arbitrary, unsupervised official conduct exacerbate the problem. This is one argument for privatization and deregulation. Opponents of privatization see the argument as ideological. The argument that corruption necessarily follows from the opportunity is weakened by the existence of countries with low to non-existent corruption but large public sectors, like the Nordic countries.[19] However, these countries score high on the Ease of Doing Business Index, due to good and often simple regulations, and have rule of law firmly established. Therefore, due to their lack of corruption in the first place, they can run large public sectors without inducing political corruption.

Like other governmental economic activities, also privatization, such as in the sale of government-owned property, is particularly at the risk of cronyism. Privatizations in Russia, Latin America, and East Germany were accompanied by large scale corruption during the sale of the state owned companies. Those with political connections unfairly gained large wealth, which has discredited privatization in these regions. While media have reported widely the grand corruption that accompanied the sales, studies have argued that in addition to increased operating efficiency, daily petty corruption is, or would be, larger without privatization, and that corruption is more prevalent in non-privatized sectors. Furthermore, there is evidence to suggest that extralegal and unofficial activities are more prevalent in countries that privatized less.[20]

There is the counter point, however, that industries with an oligarchy of companies can be quite corrupt, with collusive price-fixing, pressuring dependent businesses, etc., and only by having a portion of the market owned by someone other than that oligarchy, i.e. public sector, can keep them in line. If the public sector company is making money and selling their product for half of the price of the private sector companies, the private sector companies won't be able to simultaneously gouge to that degree and keep their customers: the competition keeps them in line. Private sector corruption can increase the poverty and helplessness of the population, so it can affect government corruption, in the long-term.[citation needed]

In the European Union, the principle of subsidiarity is applied: a government service should be provided by the lowest, most local authority that can competently provide it. An effect is that distribution of funds into multiple instances discourages embezzlement, because even small sums missing will be noticed. In contrast, in a centralized authority, even minute proportions of public funds can be large sums of money.

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Governmental corruption

If the highest echelons of the governments also take advantage from corruption or embezzlement from the state's treasury, it is sometimes referred with the neologism kleptocracy. Members of the government can take advantage of the natural resources (e.g., diamonds and oil in a few prominent cases) or state-owned productive industries. A number of corrupt governments have enriched themselves via foreign aid, which is often spent on showy buildings and armaments.

A corrupt dictatorship typically results in many years of general hardship and suffering for the vast majority of citizens as civil society and the rule of law disintegrate. In addition, corrupt dictators routinely ignore economic and social problems in their quest to amass ever more wealth and power.

The classic case of a corrupt, exploitive dictator often given is the regime of Marshal Mobutu Sese Seko, who ruled the Democratic Republic of the Congo (which he renamed Zaire) from 1965 to 1997. It is said that usage of the term kleptocracy gained popularity largely in response to a need to accurately describe Mobutu's regime. Another classic case is Nigeria, especially under the rule of GeneralSani Abacha who was de facto president of Nigeria from 1993 until his death in 1998. He is reputed to have stolen some US$3–4 billion. He and his relatives are often mentioned in Nigerian 419 letter scams claiming to offer vast fortunes for "help" in laundering his stolen "fortunes", which in reality turn out not to exist.[21] More than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999.[22]

More recently, articles in various financial periodicals, most notably Forbes magazine, have pointed to Fidel Castro, General Secretary of the Republic of Cuba since 1959, of likely being the beneficiary of up to $900 million, based on "his control" of state-owned companies.[23] Opponents of his regime claim that he has used money amassed through weapons sales, narcotics, international loans, and confiscation of private property to enrich himself and his political cronies who hold his dictatorship together, and that the $900 million published by Forbes is merely a portion of his assets, although that needs to be proven.[24]

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Judiciary corruption

There are two methods of corruption of the judiciary: the state (through budget planning and various privileges), and the private. Budget of the judiciary in many transitional and developing countries is almost completely controlled by the executive. The latter undermines the separation of powers, as it creates a critical financial dependence of the judiciary. The proper national wealth distribution including the government spending on the judiciary is subject of the constitutional economics.[25]

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Fighting corruption

Mobile telecommunications and radio broadcasting help to fight corruption, especially in developing regions like Africa,[26] where other forms of communications are limited. In India the anti corruption bureau Fights against corruption and a new ombudsman bill called jan lokpal bill is being prepared.

In the 1990s, initiatives were taken at an international level (in particular by the European Community, the Council of Europe, the OECD) to put a ban on corruption: in 1996, the Committee of Ministers of the Council of Europe,[27] for instance, adopted a comprehensive Programme of Action against Corruption and, subsequently, issued a series of anti-corruption standard-setting instruments:

  • the Criminal Law Convention on Corruption (ETS 173);[28]
  • the Civil Law Convention on Corruption (ETS 174);[29]
  • the Additional Protocol to the Criminal Law Convention on Corruption (ETS 191);[30]
  • the Twenty Guiding Principles for the Fight against Corruption (Resolution (97) 24);[31]
  • the Recommendation on Codes of Conduct for Public Officials (Recommendation No. R (2000) 10);[32]
  • the Recommendation on Common Rules against Corruption in the Funding of Political Parties and Electoral Campaigns (Rec(2003)4)[33]

The purpose of these instruments was to address the various forms of corruption (involving the public sector, the private sector, the financing of political activities, etc.) whether they had a strictly domestic or also a transnational dimension. To monitor the implementation at national level of the requirements and principles provided in those texts, a monitoring mechanism – the Group of States Against Corruption (also known as GRECO) was created.

Further conventions were adopted at the regional level under the aegis of the Organization of American States (OAS or OEA), the African Union, and in 2003, at the universal level under that of theUnited Nations.

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Whistleblowers

Main article: Whistleblower

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Campaign contributions

In the political arena, corruption is mainly proven by following the money trail. However, the connection between the contribution and anything in return is difficult to prove. For this reason, there are often unproven rumors, that are termed, smear campaign, about many politicians.

Politicians are placed in apparently compromising positions because of their need to solicit financial contributions for their campaign finance. If they then appear to be acting in the interests of those parties that funded them, it could be considered corruption. Though donations may be coincidental, the question asked is, why are they funding politicians at all, if they get nothing for their money.

Laws regulating campaign finance in the United States require that all contributions, and their, use should be publicly disclosed. However, some manage to evade disclosure till at after votes were made or years later. Many companies, especially larger ones, fund both the Democratic and Republican parties. Certain countries, such as France, ban altogether the corporate funding of political parties. Because of the possible circumvention of this ban with respect to the funding of political campaigns, France also imposes maximum spending caps on campaigning; candidates that have exceeded those limits, or that have handed in misleading accounting reports, risk having their candidacy ruled invalid. They also may be prevented from running in future elections. In addition, the government funds political parties according to their successes in elections.

In some countries, political parties are run solely off subscriptions (membership fees).

Even legal measures such as these have been argued to be legalized corruption, in that they often favor the political status quo. Minor parties and independents often argue that efforts to rein in the influence of contributions do little more than protect the major parties with guaranteed public funding while constraining the possibility of private funding by outsiders. In these instances, officials are legally taking money from the public coffers for their election campaigns to guarantee that they will continue to hold their influential and often well-paid positions.

As indicated above, the Committee of Ministers of the Council of Europe recognised in 1996 the importance of links between corruption and political financing. It adopted in 1837 the Recommendation on Common Rules against Corruption in the Funding of Political Parties and Electoral Campaigns (Rec(2003)4). This text is quite unique at international levels as it aims i.a. at increasing transparency in the funding of political parties and election campaigns (these two areas are difficult to dissociate since parties are also involved in campaigning and in many countries, parties do not have the monopoly over the presentation of candidates for elections), ensuring a certain level of control over the funding and spending connected with political activities, and making sure infringements are subject to effective, proportionate, and dissuasive sanctions. In the context of its monitoring activities, the Group of States Against Corruption has identified a great variety of possible improvements in those areas (see the country reports adopted under the Third Evaluation Round).

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Measuring corruption

Measuring corruption statistically is difficult if not impossible due to the illicit nature of the transaction and imprecise definitions of corruption.[34] While "corruption" indices first appeared in 1995 with theCorruption Perceptions Index, all of these metrics address different proxies for corruption, such as public perceptions of the extent of the problem.[35]

Transparency International, an anti-corruption NGO, pioneered this field with the Corruption Perceptions Index, first released in 1995. This work is often credited with breaking a taboo and forcing the issue of corruption into high level development policy discourse. Transparency International currently publishes three measures, updated annually: a Corruption Perceptions Index(CPI) (based on aggregating third-party polling of public perceptions of how corrupt different countries are); a Global Corruption Barometer (based on a survey of general public attitudes toward and experience of corruption); and a Bribe Payers Index, looking at the willingness of foreign firms to pay bribes. The Corruption Perceptions Index is the best known of these metrics, though it has drawn much criticism[35][36][37] and may be declining in influence.[38]

The World Bank collects a range of data on corruption, including survey responses from over 100,000 firms worldwide and a set of indicators of governance and institutional quality. Moreover, one of the six dimensions of governance measured by the Worldwide Governance Indicators is Control of Corruption, which is defined as "the extent to which power is exercised for private gain, including both petty and grand forms of corruption, as well as 'capture' of the state by elites and private interests."[39] While the definition itself is fairly precise, the data aggregated into the Worldwide Governance Indicators is based on any available polling: questions range from "is corruption a serious problem?" to measures of public access to information, and not consistent across countries. Despite these weaknesses, the global coverage of these datasets has led to their widespread adoption, most notably by the Millennium Challenge Corporation.[34]

In part in response to these criticisms, a second wave of corruption metrics has been created by Global Integrity, the International Budget Partnership, and many lesser known local groups, starting with the Global Integrity Index,[40] first published in 2004. These second wave projects aim not to create awareness, but to create policy change via targeting resources more effectively and creating checklists toward incremental reform. Global Integrity and the International Budget Partnership[41] each dispense with public surveys and instead uses in-country experts to evaluate "the opposite of corruption" – which Global Integrity defines as the public policies that prevent, discourage, or expose corruption.[42] These approaches compliment the first wave, awareness-raising tools by giving governments facing public outcry a checklist which measures concrete steps toward improved governance.[34]

Typical second wave corruption metrics do not offer the worldwide coverage found in first wave projects, and instead focus on localizing information gathered to specific problems and creating deep, "unpackable" content that matches quantitative and qualitative data. Meanwhile, alternative approaches such as the British aid agency's Drivers of Change research skips numbers entirely and favors understanding corruption via political economy analysis of who controls power in a given society.[34]

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Institutions dealing with political corruption

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See also

Wikiquote has a collection of quotations related to:Corruption
Forms or aspects of corruption
Good governance
Theoretical aspects
Anti-corruption authorities and measures
India Against corruption logo
Corruption in fiction
  • The Financier (1912), The Titan (1914), and The Stoic (1947), Theodore Dreiser's Trilogy of Desire, based on the life of the notorious transit mogul Charles Tyson Yerkes
  • Mr. Smith Goes to Washington (Hollywood film 1939)
  • Atlas Shrugged (1957 novel)
  • Henry Adams' novel Democracy (1880)
  • Carl Hiaasen's novel Sick Puppy (1999)
  • Much of the Batman comic book series
  • V for Vendetta comic book series
  • The Ghost in the Shell Anime films and series
  • Animal Farm a novel by George Orwell
  • Training Day (2001 film)
  • Exit Wounds (2001 film)
  • American Gangster (2007 film)
  • Robert Penn Warren's novel All the King's Men (1946)
  • Guru (2007 film) (Indian film)
  • INDIA

  • Political, bureaucratic, corporate and individual corruption in India are major concerns. A 2005 study conducted byTransparency International in India found that more than 55% of Indians had first-hand experience of paying bribes or influence peddling to get jobs done in public offices successfully.[1][2]

    Transparency International estimates that truckers pay US$5 billion in bribes annually.[3] In 2011 India was ranked 95th out of 178 countries in Transparency International's Corruption Perceptions Index.

    In the book 'Corruption in India: The DNA and RNA' authored by Professor Bibek Debroy and Laveesh Bhandari say that the public officials in India may be cornering as much as Rs.92,122 crore ($18.42 billion), or 1.26 per cent of the GDP, through corruption.[4] The books estimates that corruption has virtually enveloped India growing annually by over 100 percent[5] and most bribery is accrued from the transport industry, real estate and "other public services".[6] On March 31, 2010 theComptroller and Auditor General of India said that unutilised committed external assistance was of the order of Rs.1,05,339 crore.”[7]

    “The recent scams involving unimaginably big amounts of money, such as the 2G spectrum scam, are well known. It is estimated that more than trillion dollars are stashed away in foreign havens, while 80% of Indians earn less than 2$ per day and every second child is malnourished. It seems as if only the honest people are poor in India and want to get rid of their poverty by education, emigration to cities, and immigration, whereas all the corrupt ones, are getting rich through scams and crime. It seems as if India is a rich country filled with poor people",[8] the organisers of Dandi March II in the United States said.[9]

    Contents

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    History

    The economy of India was under socialist-inspired policies for an entire generation from the 1950s until the late 1980s. The economy was characterized by extensive regulation, protectionism, and public ownership, policies vulnerable to pervasive corruption and slow growth.[10][11][12][13] License Raj was often at the core of corruption.

    The Vohra Report, submitted by the former Indian Union Home Secretary, N.N. Vohra, in October 1993, studied the problem of the criminalisation of politics and of the nexus among criminals, politicians and bureaucrats in India.

    The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government. It also discussed criminal gangs who enjoyed the patronage of politicians — of all political parties — and the protection of government functionaries. It revealed that political leaders had become the leaders of gangs. Over the years criminals had been elected to local bodies, State Assemblies, and even the Parliament. The unpublished annexures to the Vohra Report are believed to contain highly explosive material.


    According to Jitendra Singh, "in the bad old days, particularly pre-1991, when the License Raj held sway, and by design, all kinds of free market mechanisms were hobbled or stymied, and corruption emerged almost as an illegitimate price mechanism, a shadowy quasi-market, such that scarce resources could still be allocated within the economy, and decisions could get made. ... These were largely distortions created by the politico-economic regime. While a sea change has occurred in the years following 1991, some of the distorted cultural norms that took hold during the earlier period are slowly being repaired by the sheer forces of competition. The process will be long and slow, however. It will not change overnight."[14] One of the major problems and obstacles to development that many developing countries face is corruption by greedy, power-hungry politicians, which is endemic in certain parts of the world.

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    Politics

    As of December 2008, 120 of India's 522 parliament members were facing criminal charges.[15] Many of the biggest scandals since 2010 have involved very high levels of government, including Cabinet Ministers and Chief Ministers, such as in the 2G spectrum scam, the 2010 Commonwealth Games scam and the Adarsh Housing Society scam, mining scandal in Karnataka and cash for vote scam.

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    Bureaucracy

    A 2005 study done by Transparency International (TI) in India found that more than 50% of the people had firsthand experience of paying bribe or peddling influence to get a job done in a public office.[2]Taxes and bribes are common between state borders; Transparency International estimates that truckers pay annually US$5 billion in bribes.[3] A 2009 survey of the leading economies of Asia, revealed Indian bureaucracy to be not just least efficient out of Singapore, Hong Kong, Thailand, South Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines and Indonesia; further it was also found that working with India's civil servants was a "slow and painful" process.[16]

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    Land and property

    Officials often steal state property. In cities and villages throughout India, consisting of municipal and other government officials, elected politicians, judicial officers, real estate developers and law enforcement officials, acquire, develop and sell land in illegal ways.[17]

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    Tendering processes and awarding contracts

    Government officials having discretionary powers in awarding contracts engage in preferential treatment for selected bidders and display negligence in quality control processes[citation needed]. Many state-funded construction activities in India, such as road building, are dominated by construction mafias, which are groupings of corrupt public works officials, materials suppliers, politicians and construction contractors.[18] Shoddy construction and material substitution (e.g. mixing sand in cement while submitting expenses for cement) result in roads and highways being dangerous, and sometimes simply washed away when India's heavy monsoon season arrives.[19]

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    Medicine

    In Government Hospitals, corruption is associated with non availability of medicines, getting admission, consultations with doctors and availing diagnostic services. [2]

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    Income tax department

    There have been several cases of collusion of officials of the income tax department of India for a favorable tax treatment and relaxed prosecutions in return for bribes.[20][21]

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    Preferential award of public resources

    See also: Illegal mining in India

    As detailed earlier, land in areas with short supply is relatively common with government entities awarding public land to private concerns at negligible rates. Other examples include the award of mining leases to private companies without a levy of taxes that is proportionate to the market value of the ore.[citation needed]

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    Driver Licensing

    A study conducted between 2004 and 2005 found that India’s driver licensing procedure was a hugely distorted bureaucratic process and allows drivers to get licenses despite their low driving ability through promoting the usage of agents. Individuals with high willingness to pay make a significant payment above the official fee and most of these extra payments are made to agents, who act as an intermediary between bureaucrats and applicants[22]. The average license getter paid Rs 1080, approximately 2.5 times the official fee of Rs 450, in order to obtain a license. On average, those who hired agents had a lower driving ability, with agents helping unqualified drivers obtain licenses and bypass the legally required driving examination. Among the surveyed individuals, approximately 60% of the license holders did not take the licensing exam and 54% of those license holders failed an independent driving test[23].

    Agents are the channels of inefficient corruption in this bureaucratic driver licensing system, facilitating access to licenses among those who are unqualified to drive. Some of the failures of this licensing system are caused by corrupt bureaucrats who collaborate with agents by creating additional barriers within the system against those who did not hire agents[24].

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    Black money

    Main article: Indian black money

    Black money refers to money removed from the official economy (via corruption, bribery, tax evasion, etc.) and stored outside of the country. A November 2010 report from the Washington-based Global Financial Integrity estimates that India lost at least US$462 billion in illicit financial flows, another word for black money, from 1948 through 2008. The report also estimated the size of India's underground economy at approximately US$640 billion at the end of 2008 or roughly 50% of the nation's GDP.[25]

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    Black Money in Switzerland

    According to a 2010 The Hindu article, unofficial estimates indicate that Indians had over US$1456 billion in black money stored in Swiss banks (approximately USD 1.4 trillion).[26] While some news reports claimed that data provided by the Swiss Banking Association Report (2006) showed India has more black money than the rest of the world combined,[27][28] a more recent report quoted the SBA's Head of International Communications as saying that no such official statistics exist.[29] Another report said that Indian-owned Swiss bank account assets are worth 13 times the country’s national debt.The current investigation is undertaken by the Income Tax Department.[30]

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    Judiciary

    According to Transparency International, judicial corruption in India is attributable to factors such as "delays in the disposal of cases, shortage of judges and complex procedures, all of which are exacerbated by a preponderance of new laws".[31]

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    Armed forces

    The Indian Armed Forces have witnessed corruption involving senior armed forces officers from the Indian Army, Indian Navy and Indian Air Force. A number of scandals in the 2000-2010 period damaged the military's reputation; such scandals included skimming of armed forces money, re-selling of government property, and faking combat missions.[32]

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    Right to Information Act

    Main article: Right to Information Act

    The Right to Information Act (2005) and equivalent acts in the states, that require government officials to furnish information requested by citizens or face punitive action, computerization of services and various central and state government acts that established vigilance commissions have considerably reduced corruption or at least have opened up avenues to redress grievances.[2][33] The 2006 report by Transparency International puts India at the 70th place and states that significant improvements were made by India in reducing corruption.[34][35]

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    Ombudsmen

    Main article: 2011 Indian anti-corruption movement

    The Lokayukta is an anti-corruption organization in the Indian states.[36][37] These institutions are based on the Ombudsman in Scandinavian countries. An amendment to the Constitution has been proposed to implement the Lokayukta uniformly across Indian States as a three-member body, headed by a retired Supreme Court judge or high court chief justice, and comprise of the state vigilance commissioner and a jurist or an eminent administrator as other members.[38]

    Social welfare worker Anna Hazare has led to a movement to compel the Indian Government to notify the Committee for the implementation of the Lokayukta against corruption as an independent body and also giving enough powers to the Lokayukta to also receive corruption complaints against politicians, bureaucrats and even sitting judges. Anna Hazare is currently pursuing an agenda to pass a bill called Jan Lokpal bill, and he has gathered the support of many citizens residing in metropolitan cities of India. He was on an indefinite fast at the Ramlila Grounds, Delhi, in order to campaign for the cause.[39]

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    Whistleblowers

    See also: Whistleblower protection in India

    Whistleblowers play a major role in the fight against corruption. India currently does not have a law to protect whistleblowers, which was highlighted by the assassination of Satyendra Dubey. Indian courts are regularly ordering probe in cases of murders or so-called suicide of several whistle blowers. One of the latest cases of such murder is of V Sasindran Company Secretary of Palakkad based Malabar Cement Limited, a Government company in Kerala and his two minor children, Kerala High Court ordered CBI probe on 18 February 2011. Initially, CBI showed its unwillingness for probing into such cases citing over-burden as a reason.

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    Anti-Corruption Laws in India

    Public servants in India can be penalized for corruption under the

    India is also a signatory (not ratified) to the UN Convention against Corruption since 2005. The Convention covers a wide range of acts of corruption and also proposes certain preventive policies.[40]

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    Anti-corruption police and courts

    The income tax department of India, Central Vigilance Commission and Central Bureau of Investigation all deal with anti-corruption initiatives. Certain states such as Andhra Pradesh (Andhra Pradesh Anti-corruption Bureau) and Karnataka (Lokayukta) also have their own anti-corruption agencies and courts.[41][36]

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    Anti-corruption organizations

    A variety of organizations have been created in India to actively fight against corrupt government and business practices. Notable organizations include:

    One organization, the Lok Satta Movement, has transformed itself from a civil organization to a full-fledged political party, the Lok Satta Party. The party has fielded candidates in Andhra Pradesh, Tamil Nadu, and Bangalore. In 2009, it obtained its first elected post, when Jayaprakash Narayan won the election for the Kukatpally Assembly Constituency in Andrha Pradesh.

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    Effects of corruption

    According to a report by KPMG, "high-level corruption and scams are now threatening to derail the country's credibility and [its] economic boom".[45]

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    Economic Concerns

    Corruption may lead to further bureaucratic delay and inefficiency as corrupted bureaucrats may introduce red tape to extract more bribes[46]. Such inadequacies in institutional efficiency could affect growth indirectly by lowering the private marginal product of capital and investment rate[47]. Levine and Renelt showed that investment rate is a robust determinant of economic growth[48]. According to the neoclassical growth model, institutional variables contribute to determining steady-state per capital income levels and speed of convergence to its steady state, hence affecting its growth rate[49].

    Bureaucratic inefficiency could also affect growth directly, such as through misallocation of investments in the economy[50]. When a country’s economy is below its steady-state income level, higher corruption could result in lower growth, for a given level of income[51].

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