SECTION 2: CAUSES OF CORRUPTION
14. It is possible to identify a number of incentives
to corruption. The Corner House stated that it was "...the
'benefits' of corruption that fuel its growth and sustain its
They said unless the multilateral development banks, bilateral
agencies and the private sector ensured that the institutional
costs of indulging in corruption outweighed the benefits, there
was little prospect for change. In this Section we examine what
role weak institutions, failures of the criminal justice system,
the nature of the state, and low pay in the public sector have
in causing corruption before exploring whether there is a cultural
dimension to corruption.
Weak Institutions and Poor Governance
15. It is clear from the evidence given to the Committee
that poor governance and weak institutions are seen as the primary
causes of corruption. The UNDP, in its booklet 'Fighting Corruption
to Improve Governance', said "Corruption is principally a
governance issue - a failure of institutions".
Corruption is symptomatic of weak and failing institutions and
much of the current work by donors focuses on building and sustaining
better systems of government. Clare Short said "It becomes
more and more difficult to disentangle corruption work from creating
a modern state that looks after its money properly and bears down
We believe that building and strengthening institutions and
improving governance are vital if corruption is to be eliminated.
Criminal Justice and the Rule of Law
16. Two of the factors that contribute to the development
of a society with endemic corruption are the lack of appropriate
restraint on power, and the lack of an unfettered and independent
ability to prosecute. Criminal justice and the rule of law are
a vital part of tackling extortion and bribery. Their absence
provides a fertile breeding ground for corruption. Clare Short
said, "We have criminal justice systems across the developing
world that are very corrupt, and it is the poor old poor who cannot
pay their way out of them".
Corruption in the judiciary can take many forms with payments
to obtain access to courts, favourable judgements (where there
can be a bidding process between the parties), or to prevent matters
coming to court. There is often a perception that it is a judge
who is being paid, while it might in fact be a court clerk.
Delays are common, increasing the opportunities to extort and
obtain bribes. Corruption in the judiciary was an issue that was
raised during our recent visit to Cambodia. Transparency International
noted that proceedings are unlikely to be brought in a state where
corruption involves a ruling elite, as is the case in Kenya. They
pointed out that the situation might change when an elite loses
power, as was the case in Indonesia and Pakistan, but difficulties
often remain, including previously granted immunities from prosecution.
David Phillips, Crown Agents, said "...it is not so much
that there is a culture of corruption, but there is a power beyond
prosecution in many of the countries in which we operate in the
developing world where the chances of a particular case reaching
prosecution and appropriate deterrent action or sanctions being
taken is relatively limited".
It may also be the case that where political rulers are insulated
from prosecution there may be little to restrain their corrupt
17. It is clear that building better institutions,
particularly in relation to criminal justice and the rule of law,
must be a priority for any donor seeking to tackle corruption
effectively. Donors must not underestimate the difficulties associated
with bringing about change in an environment where there is likely
to be resistance from vested interests, who will often be extremely
The Nature of the State
18. Mark Malloch Brown, UNDP, said recent changes
in world politics meant issues like corruption were now being
debated and addressed in what had previously been closed, stateowned,
authoritarian political systems.
Anglo American stated endemic and systemic corruption were most
likely to thrive where state involvement was pervasive, where
there was excessive regulation and where officials had a significant
amount of discretion. They noted that the absence of parliamentary
accountability, skilled law enforcement, an independent judiciary
and scrutiny by the media and civil society made corrupt practice
Clare Short also recognised this when she noted that "Old,
very statist systems create lots of opportunities for corruption.
China has this problem. Everything is regulated and you have to
get a licence or permission for everything. At every single point
in the chain there is the possibility of somebody giving someone
a bung and [such systems] tend to maximise that kind of corruption".
This was certainly a contributing factor to the kind of corruption
we heard about during our visit to Vietnam. There is a clear relationship
between levels of corruption and the level of bureaucracy in a
Low Pay in the Public Sector
19. Richard Manning, DFID, said "It is certainly
the case where you have extremes of wealth and poverty that the
pressures for corruption are greater".
Political patronage has often led to promises of jobs which in
turn has led to large unaffordable public sectors, low wages and,
ultimately, weak systems.
Laurence Cockcroft, Transparency International (UK), said "It
is clear that very many civil servants in many poor countries
are grossly underpaid, to the extent that it is unreasonable to
expect them to survive on their salary".
Clare Short recognised civil service pay was an important issue
and gave this as one of the reasons DFID were engaged in civil
service reform in a number of countries.
20. Richard Manning, DFID, indicated that there were
a number of countries where wages had fallen in real terms to
the point that they no longer represented a living wage.
However, he was able to point to Uganda, Tanzania and Ghana as
countries who were serious about addressing this issue.
DFID said that where pay was below a living wage, people were
bound to seek other ways of maintaining their families, and bribes
were less likely to be resisted.
It reported mixed success on public service reform programmes
but said that where there was real political commitment such programmes
had made progress: in Tanzania, average public service salaries
were up by 70 per cent in real terms, and in Uganda wages had
increased by a factor of ten since 1991. In these countries, improved
levels of pay, coupled with better management systems, had reduced
incentives and opportunities for corruption.
Low wages in the public sector was a topic that repeatedly came
up during our visit to Vietnam and Cambodia. In Cambodia we found
that a school headmaster might earn much less than a machinist
or driver. Clare Short said "We should just have the humility
to think, if we were an extremely lowly paid civil servant in
a developing country, where your salary will not feed your family,
you would take payments, you would have to. You cannot go home
and say, 'Sorry, children, I'm a very moral person, there's no
21. Many civil servants cannot themselves be categorised
as poor but they often support poor relatives in rural areas.
This needs to be taken into account in any public sector reform
as the support these civil servants provide is probably an important
source of funds for poor family members.
Bribes collected by civil servants can be said to perform a redistributive
function, albeit an inefficient and inequitable one with poor
families who have a relative in government benefiting more than
those who do not.
It is not the very poor who tend to be the most corrupt but managers
and professionals who have greater opportunities. It is the combination
of both better management systems and adequate pay that will reduce
corruption - they cannot be tackled in isolation.
Richard Manning, DFID, said "You cannot expect to root out
corruption if you do not pay your public service appropriately".
Low wages in the public sector and weak management systems provide
both the motive and opportunity for corruption. We believe it
is vital that public service reform should address levels of pay,
but this will only successfully reduce corruption when it is combined
with improvements in management controls and systems.
A Cultural Issue?
22. Corruption is not something that only affects
developing countries. As Philip Allott, University of Cambridge,
said "History shows that the threat of governmental corruption
is a natural condition of society, an endemic disease of the body
politic. All public power is always and everywhere corruptible".
Our own history confirms this; Clare Short said "None of
us should pretend there is some culture of corruption in developing
countries - we had our own culture of corruption too".
However, it is still sometimes suggested that there is a 'cultural
dimension' to corruption or that corruption is more ingrained
in some societies. CIET told the Committee that ordinary people
from many different parts of the world were clear about what constituted
corruption and were unhappy about the effect it had on their lives.
Mark Malloch Brown said "I ... think there are some cultural
dimensions but, broadly, I think the cultural argument is a mischiefmaking
argument in that I do not know countries which genuinely think
that corruption maintains a sense of hierarchy and admirable tradition".
The Corner House also challenged the idea that there was a "Third
World culture of corruption" and argued that much of the
bribery by Western companies was underpinned by the incorrectly
held view that "bribery is the way one does business in the
The UNDP booklet 'Fighting Corruption to Improve Governance' said
that traditions of gift giving do not translate into widespread
acceptance of corrupt practice.
23. We support Clare Short when she said "The
difference between developing countries and us is not that they
have less moral people than we have - because of course we have
little outbreaks of corruption in voluntary organisations, in
local government, politics and business as we know - but we have
powerful systems that check and catch it. The difference between
developing countries and countries like us is not the morality
of the people but the systems".
We have seen no evidence to suggest corruption is a cultural phenomenon.
32 Evidence, p.301 Back
Corruption to Improve Governance, UNDP, Feb 1999, p.10 Back
34 Q.761 Back
35 Q.762 Back
36 Q.477 Back
38 Q.336 Back
and Good Governance, Discussion Paper 3, UNDP, July 1997, p.26 Back
40 Q.311 Back
42 Q.781 Back
44 Q.93 Back
45 Q.763 Back
46 Q.121 Back
47 Q.763 Back
48 Q.93 Back
49 Q.93 Back
52 Q.754 Back
and Good Governance, Discussion Paper 3, UNDP, July 1997, p.47 Back
and Good Governance, Discussion Paper 3, UNDP, July 1997, Executive
Summary, p.viii Back
56 Q.93 Back
58 Q.754 Back
60 Q.306 Back
Corruption to Improve Governance, UNDP, February 1999, p.8 Back
63 Q.754 Back