David W. Lovell
During the past decade, public sector corruption has become a prominent issue in national and international forums. It is increasingly discussed, legislated against and subject to international sanctions. It may even be increasing. The literature on corruption has expanded rapidly over the same period, as corruption has graduated from an issue in comparative politics to a central problem of political and economic development in democratizing states. The World Bank now has a major campaign against corruption, and NGOs – and especially Transparency International – have helped to bring the issue to the forefront of world attention. In 1996, the United Nations General Assembly adopted the UN Declaration against Corruption and Bribery in International Commercial Transactions. In 1999 and 2001, successive Global Forums on Fighting Corruption and Safeguarding Integrity were held in Washington, DC and The Hague.
And there are substantial regional initiatives against corruption in Latin America, Africa and the Asia Pacifi c, the latter sponsored in part by the Asian Development Bank.
Established liberal democracies have well-publicized corruption allegations and investigations, often targeting senior politicians, bureaucrats and police. Significant corruption allegations have been made against former German Chancellor Helmut Kohl, and against French President Jacques Chirac. In Australia, to select some recent examples, a former federal parliamentarian was jailed for soliciting bribes from illegal immigrants to enable them to settle legally; and a number of elected local officials in the state of New South Wales were investigated by the Independent Commission Against Corruption for allegedly accepting bribes to facilitate construction work in their bailiwick. But while such cases reduce trust in politicians and other public officials, there remains a high level of confidence in
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the integrity of the state administration itself. The Australian public sector, like those of most established liberal democracies, is widely perceived as relatively uncorrupt (Grabosky and Larmour 2000).
There are corruption scandals to be sure; but there are also anti- corruption institutions, public inquiries, investigative media, and a generalized intolerance of corrupt officials that threatens them with public exposure, disgrace and prosecution.
Yet in some countries, corruption seems to be rampant, anti- corruption measures are ineffective and many citizens are resigned to coping with corruption in their daily lives. The charge of rampant corruption has been levelled against the region of Southeast Asia (Backman 1999), with the notable exception of Singapore. Even senior politicians in many Southeast Asian countries identify corruption as a major problem, though their motives are often mixed, and may include political advantage. In July 2001 the then prime minister of Papua New Guinea, Sir Mekere Morauta, publicly described both his own party and his government as systematically corrupt (Forbes 2001). These corrupt elements, he suggested, were attempting to block the privatization of state assets (which would reduce their opportunities for exploiting public resources). Malaysia’s then deputy premier, Abdullah Ahmad Badawi, was reported as conceding to a conference of the ruling United Malays National Organization in June 2001 that it was perceived as a corrupt organization (Lyall 2001). In many other parts of the world, corruption is at a level which does not simply discourage direct foreign investment, but brings the very legitimacy of states into question among their citizens. Close attention to the developments in some postcommunist states, for example, has revealed a rapid increase in corruption. Cohen (1995) argues that tens of thousands of businesses in Russia are controlled by organized crime. State officials are either powerless to act or are willing accomplices. The situation in Romania (Mungiu-Pippidi 1997) and Yugoslavia (Komlenovic 1997), among others, is similarly grim.
The point of this – rather blunt – distinction between the relatively uncorrupt and the rampantly corrupt, or between incidental and endemic corruption, is not to apportion praise or blame. ‘Relatively uncorrupt’ does not mean uncorrupt. Indeed, the relatively uncorrupt may be compounding the problem elsewhere. Thus Abramovici (2000) argues that corruption has become worse since decolonization in the 1960s: ‘In simple terms the corrupted are public bodies in emerging countries, and the corrupters are companies based in rich countries.’ The USA may have been one of the first to legislate against corruption, with its 1977 Foreign Corrupt Practices Act, but it still seems the preferred destination for ‘laundered’ funds. And many Western companies (sometimes even backed by their governments) corrupt foreign officials to gain an advantage over their competitors.
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Understanding Endemic Corruption in Postcommunist States 67 Rather, the distinction is meant to highlight the notion that there is a different dynamic of corruption occurring in the two situations.
Any attempts to deal with corruption – to counteract its causes and address its effects – must take this difference into account.
This chapter makes a case for sustaining the distinction between incidental and endemic types of corruption, and explores endemic corruption through the experience of the postcommunist states, and particularly the former Soviet Union. It first discusses the usual (but generally unexamined) assumptions about public sector corruption, in terms of organizational mechanics and economic stimuli, and argues that these do not fit the range of non-Western social contexts within which much of the world’s endemic corruption occurs. It goes on to examine the emergence of postcommunism, and its related endemic corruption, out of the communist governmental system. And it ends by arguing that postcommunism is a transitional experience, moving towards modernity, in ways similar to traditional societies confronted by the norms of individualist, legalistic, society. Dealing with endemic corruption requires a sensitivity to the social contexts which nurture it. Transforming corruption from an endemic to an incidental problem will require a major change in social, political and organizational culture that cannot simply be legislated into existence, nor imposed by international organizations, however well-meaning.
UNDERSTANDING CORRUPTION
The World Bank defi nes corruption as the abuse of public power for private benefi t, and such a defi nition is widely accepted partly because it is relatively neutral as between different states, allowing cross-state comparisons. But while it is convenient, such a defi nition is too simple. In particular, it makes assumptions about the underlying norms of behaviour in public offi ce – including the very distinction between public and private – that may not always be warranted. To understand corruption better, it is important to consider the social context within which it is constructed.
I shall confine my remarks here to corruption in the sphere of government, despite the recent extension of ‘corruption’ to cover the private sphere. Of course, abuses occur in the private sphere, as people take advantage of their positions to defraud their companies or shareholders for personal benefit. But the laws that identify and prohibit ‘theft’ from employers and customers tend to be clear and clearly understood, and direct self-interest on the part of all the actors in this sphere leads to a heightened scrutiny of transactions and a readiness to complain about irregularities. Irregularities or improprieties in the public sphere are more difficult to identify, both
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because of the mixed motives of public officials (for whom public office is usually a career, and thus in part a means of private gain), and because of the sometimes uncertain standards of public behaviour, and thus the difficulty of recognizing an abuse of the norms.
A legalistic account of the World Bank’s definition identifies corruption as those acts performed by officials when departing from their legal obligations in exchange for personal advantages (LaPalombara 1994). This definition may be easy to operationalize, but it assumes the prevalence of the standards of rational-legal rule.
Corruption on these terms is the use of public office in ways other than those sanctioned by rational-legal authority. And while Carl Friedrich agreed that corruption exists whenever ‘a responsible functionary or office holder, is by monetary or other rewards … induced to take actions which favor whoever provides the reward and thereby damage the group or organization to which the functionary belongs, more specifically the government’ (1972: 127–8), he nevertheless identified its core meaning as behaviour that deviates from a prevalent norm. The key issues, therefore, are not just determining whether a
‘deviation’ has occurred, but what is the norm.
The normative dimensions of corruption are most apparent when the term is used in its generic sense as ‘deviation from a norm’, and is applied to any phenomenon considered valuable. Passionate warnings about the corrupt society as diseased (Payne 1975) reveal the importance of norms, as do complaints about the corruption of many sporting codes because of the increasing importance of monetary incentives to their players and officials. The international Olympic movement, for example, has been beset with such criticisms for many years. The International Cricket Council even established an inquiry into the corruption of cricketers after revelations about the extent of bribery in the game. This is particularly significant, for cricket – though in many ways a peculiar game – was once a byword for decent behaviour and playing by the rules.
Some see public sector corruption as due to the rise of the career politician, who joins politics for personal gain. Others, economists in particular, see corruption as a product of the rise of state intervention, with more opportunities for bureaucrats and politicians to circumvent the rules and act arbitrarily in their own cause. Certainly, both these explanations have some purchase: they provide motive and opportunity. Another view explains corruption as a product of the exaltation of the market mechanism, and a blurring of the lines between public and private, and the primacy of greed (seemingly reinforced by the ‘crony capitalism’ involved in the growth and then the collapse of the Asian economic miracle in the mid to late 1990s).
Corruption may also be driven by the rise of big donors to political parties, and a decline in membership by ordinary citizens. Longevity
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Understanding Endemic Corruption in Postcommunist States 69 in power (a factor in non-democracies, but also in democracies where governments win many successive elections) may also contribute to corruption, with its disdain for accountability of the actions of public officers.
The ‘structural temptation’ to incidental corruption can be explained in a relatively straightforward way, despite the diversity of causes already identified. Corruption of this type occurs when government has a monopoly supply of a good, where there is discretion on the part of officials, and where there is relative secrecy.
As Robert Klitgaard (1988) neatly put it, ‘Monopoly + Discretion – Accountability = Corruption’. All of these conditions are met in a great deal of government business. Where the defences of hierarchical and other types of external surveillance, and the defences of a professional ethic, morality and other types of internal surveillance, are together insufficient, corruption will occur. Corruption of this type is ineradicable, though it may be greater or smaller in different states and in different components of those states, depending on opportunities and traditions.
Furthermore, there would seem to be greater opportunities for corruption the larger the public sphere (the more people it employs, or the wider the sphere of its interference and regulation of the private sphere, including the economy). But even if the opportunities exist, not all extensive states are extensively corrupt. Some of the least corrupt countries in the world – Canada, Denmark, Finland, the Netherlands and Sweden – have some of the largest public sectors, measured as shares of tax revenue or public spending in GDP. There is a genuine distinction between the size of government and its quality. Many developed states still have a significant problem with corruption, as the example of Italy shows. The United States, too, has its share of corruption (Dobel 1978; Rose-Ackerman 1999).
Much of the recent discussion about corruption, and the subsequent treaties and legislation, sees corruption as a type of mechanical problem, requiring some procedural fixes. Thus corruption is seen largely as the result of inadequate training, payment, professionalism and supervision of public officials. Evidence of growing corruption suggests merely that the fixes need to be more rigorously adopted and enforced. The corollary is that corruption can be limited, but never eradicated: the motivation of greed (let alone need) will always remain, opportunities to benefit from public office can never be entirely closed off, and corrupt transfers can generally be disguised.
Corruption, therefore, is part of the price governments pay for having extensive administrations and complex laws.
Within this context Peter Eigen, founder of Transparency International, has put forward an elementary five-point anti- corruption programme (Eigen 1996: 162): commitment by leaders;
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anti-corruption legislation and enforcement; review of government procedures; salary review of the government sector; and review of legal procedures and remedies to make them an effective deterrent.
Keith Henderson, a senior adviser with the United States Agency for International Development (USAID) proposed an eight-point action plan ‘aimed at (a) promoting more governmental accountability and transparent democratic processes; (b) increasing trade and investment and economic growth; (c) building capacity and public confidence in governmental institutions, and (d) developing public respect for rule of law societies’ (Henderson 1998). His plan was adopted by USAID in December 1997 for East Central European and former Soviet Union states. And Robert Klitgaard has recently suggested some practical means for curing and preventing corruption in cities (Klitgaard et al. 2000).
Such approaches may be appropriate for countries where corruption is incidental, where the division between private and public is long- standing, and rational-legal norms of behaviour in the public sphere are established and accepted. But for much of the world, they seem inadequate, and destined to failure. For they assume that what we mean by ‘corruption’ is obvious and uncontentious. In many countries corruption is a much more complex problem connected with a transition from one political, cultural and organizational culture to another. The normative basis of ‘corruption’ in such countries is not clearly established, and public officials rely now on one and now on another understanding of their role. While procedural measures are not irrelevant in countering endemic corruption, there is a much more profound change in society and culture that needs to take place to address its roots.
The obvious objections to the usual understanding of corruption reveal that cultural contexts play an important role in the behaviour of public officials, and should play a larger role in our understanding of them. In the first place, the abuse of public power can be not solely (or even) for private benefit, but is sometimes for the benefit of one’s class or party, or friends or kin. Officials may depart from the rules out of a sense of loyalty, and without any personal gain involved. In some societies, gift-giving is an important part of social relationships, including the giving of gifts to officials. Bribes should be distinguished from gifts; Tanzi (1998) explains that ‘A bribe implies reciprocity while a gift should not.’ The relationship is actually more complex and reciprocal, as Mauss revealed in his seminal study of gift-giving in pre-modern societies; such gift-giving can create and reinforce social relationships, including hierarchies (1970: 72). Such considerations led Heywood to argue that ‘the meaning of political corruption might vary with the nature of the political system in question’ (1997: 6).
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Understanding Endemic Corruption in Postcommunist States 71 LEGAL-RATIONALITY
Most discussions of political corruption seem to be based on the assumption that corruption is a deviation from the norm of the legal-rational form of authority, in the sense that was established by Max Weber. In Weber’s model the relationships between offi cials and citizens are formalized and regulated, with offi cials serving the state; the offi ce rather than the incumbent is the most important element of the administrative system; and personal relationships with clients of the administration are subordinate to the formal, professional elements. This model presumes a certain sort of society, relatively extensive and anonymous, with a reliance upon formal, legal mechanisms and upon the exchange of values for private benefi t in a market economy. Individuals are the basic units, not families or estates. Such characteristics do not generally describe societies that have substantial traditional or kinship structures, nowadays often described as ‘developing’, nor all the societies that have emerged from communism.
Activities that are regarded as corrupt from an external perspective, whether because they offend Western norms, or even the legal code of the society in question, can nevertheless be functional.
As Samuel Huntington (1968: 64) explained in his major study of changing societies:
corruption provides immediate, specific, and concrete benefits to groups which might otherwise be thoroughly alienated from a society. Corruption might thus be functional to the maintenance of a political system in the way that reform is. Corruption itself may be a substitute for reform and both corruption and reform may be substitutes for revolution.
This is to see corruption as a pressure relief valve. It also fits with the Soviet experience, where a great deal of corrupt and illegal behaviour was undertaken with the tacit acceptance of the Communist Party:
From an economic standpoint, the level of corruption that obtained in the Soviet system was no less a logical product of that system than were the queues of citizens seeking scarce food items. Given the nature of the Soviet system … the creation of ‘the corrupt society’ was absolutely inevitable. (Clark 1993: 203)
This point is reinforced by an earlier study (Berliner 1957) of management methods in the USSR between 1938 and 1957; managers used the illegal methods of blat and tolkachi simply to make the system work.
In connection with the Soviet system, Clark offers a key insight:
The law-based notion of official corruption, which may be defined as behavior of public officials aimed at the acquisition of forbidden or circumscribed benefits and made possible as a result of their official duties or position, can
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exist only in those societies that have a relatively well-developed notion of public office. (1993: 8)
Corruption, in the generally used sense, assumes that the role of public official is clearly understood by both official and citizen. But this cannot be taken for granted. The code of behaviour, and the expectations, in transitional states – those where legal-rational forms of authority are not predominant – are not always the same as for those who criticize corruption (Nye 1970: 566–7). They tend to be characterized by different, and competing, sets of norms. Traditional forms of authority exist side by side with modern forms; councils of tribal elders alongside parliaments, for example. Often these types of authority coexist in one person, who may be a senior kin figure and also a senior politician or bureaucrat. The transitional period is a period of tension between these different codes, or standards. As Huntington put it: ‘Corruption in a modernizing society is thus in part not so much the result of the deviance of behavior from accepted norms as it is the deviance of norms from the established pattern of behavior’ (1968: 60).
Understood in this way, corruption is a problem not just for the reasons that it discourages investment and delegitimizes governments (which can become ‘kleptocracies’ (Andreski 1968)) but because it traps them in a vicious cycle. The weakness of developing, or transitional states in trying to build legitimate institutions – what Gunnar Myrdal (1970) has called ‘soft states’, characterized by corruption, racketeering, bribery, arbitrariness, political expediency and indiscipline – is due to the relative lack of power in the system, and the lack of countervailing powers. It has been noted of many developing countries that:
Coercion, force and authoritarian rule are all present in abundance, but power is a genuinely scarce commodity … There are few freely operating opposition political parties or independent judiciary systems. Most legislatures are or the rubber stamp variety. Interest groups are primitive and are mostly under the control of the government itself. Press freedom is rare … Laws are made or unmade and enforced or unenforced not according to some master guide, such as a constitution, but according to the whim of the administrator and the special access enjoyed by traditional elites. (Bertsch et al. 1991: 629–30)
LEGAL-RATIONALITY AND THE COMMUNIST SYSTEM
Soviet socialism was described in many different ways, and debates raged over ‘totalitarian’, ‘vanguard party’ and ‘pluralist’ models (Fortescue 1986) in an attempt to identify the key elements. It was particularly popular – whatever other description was used – to think of Soviet reality as ‘bureaucratic’. It was a label that Lenin had used, and Trotsky (and those he inspired in some way, especially Bruno
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