Factors promoting corruption

Definition of corruption

Defining corruption itself is problematic. It has been defined in many different ways, each lacking in some aspect. It can be simply defined as behavior that corrupts.

Some experts defined corruption as an all-inclusive variable comprising of bribes, bureaucratic inefficiency, extortion, and embezzlement. The most well known is “the abuse of public roles or resources for private benefit” This is the definition used by the World Bank. (Robins on, 1998). Similarly, Transparency International has defined corruption as the misuse of entrusted power for private gain (Transparency International, 2005). From these definitions it should not be concluded that corruption cannot exist within private sector activities. Especially in large private enterprises, this phenomenon clearly exists, as for example in procurement or even in hiring. It also exists in private activities regulated by the government. In several cases of corruption, the abuse of public power is not necessarily for one’s private benefit but it can be for the benefit of one’s party, class, tribe, friends, family, and so on. In fact, in many countries some of the proceeds of corruption go to finance the political parties.

Not all acts of corruption result in the payments of bribes. For example, a public employee who claims to be sick but goes on vocation is abusing his public position for personal use. Thus, he is engaging in the act of corruption even though no bribe is paid. Or a president of a country who has an airport built in his small hometown is also engaging in the act of corruption that does not involve the payment of a bribe.

It is important to distinguish bribes from gifts. In many instances, bribes can be disguised as gifts. A bribe implies reciprocity while a gift should not. However, even though the distinction is fundamental, it is at all times difficult to make. At what point does a gift become a bribe? Does the distinction depend on the sizes of gifts? What about cultural differences that can explain different sizes of gifts? What if a large gift is not given to the person who provides the favour but to a relative to that person? In any case this indicates that identification of a bribe may not always be simple.

Factors promoting corruption

The causes or factors that promote corruption are those that affect the demand (by the public) for corrupt acts and those that affect the supply (by public officials) of acts of corruption. Among the factors affecting the demand, the most important are (1) regulations and authorizations; (2) certain characteristics of tax systems (3) certain spending decisions; and (4) provision of goods and services at below-market prices. Among the factors affecting the supply of acts of corruption are (1) the bureaucratic tradition; (2) the level of public sector wages; (3) the penalty systems; (4) institutional controls; (5) the transparency of rules, laws, and processes; and (6) the examples set by the leadership. (for more information see http://www.imf.org/external/Pubs/FT/staffp/1998/12-98/pdf/tanzi.pdf )