Corruption vs anti-corruptionBoth bribe takers and givers may benefit from a transaction but it is society that suffers
In a simpler world, corruption is a problem and anti-corruption is a response to it. Had the world been dichotomised into black and white, good and bad or true and false, life would have been much simpler.
But the real world is far more complicated. Take the case of the ongoing war between senior journalist and rights activist Kanak Mani Dixit and our constitutional anti-graft agency, the Commission for the Investigation of Abuse of Authority (CIAA).
The issues of corruption and anti-corruption have been blurred to such an extent that it is difficult to distinguish one from the other. What is corruption here and what is anti-corruption? How do you relate the problem—a personal vendetta, anti-corruption drives against illicit enrichment, contradictions between human rights, and press-freedom?
Save a few, donors supporting anti-corruption drives in Nepal must have been perplexed by the case in hand. Should they support the international outcry over the CIAA action or the agency in its efforts to catch the big fishes in Nepal? For an impatient observer like me, it is as shameful on the part of the CIAA to resort to humiliation tactics—serving notice while Dixit was about to board a flight, taking him into custody on a Friday and putting him at Gaushala Police Station—as it is with Dixit evading custody under the pretext of deteriorating health condition.
Problem or solution?
When it comes to fighting corruption, broadly speaking, there are two strands of thought. The first one is known as the ‘Principal-Agency Theory’, which assumes that corruption is an individual aberration where due to information asymmetry, inadequate monitoring and incentive and the punishment system, the principal cannot detect corruption by his/her agent(s).The solution here is to get rid of one or two rotten apples in order to save the whole lot. There is no problem with this theory as long as its assumptions are correct.
However, the theory will have limited use when the problem is not so much with a few rotten apples as with the crate that is rotten. In Nepal, we are basically dealing with systemic corruption. Corruption here is a mere symptom of a deeper disease of a faulty system. In such a dysfunctional system, corruption acts as a solution rather a problem. It will be too costly to become a saint when you are surrounded by thugs and cheaters. Recently, the association of transport operators went on a strike demanding a reduction in penalty for traffic rules violation. To a naïve outsider, this could be the height of absurdity. However, the Babu Ram Bhattarai-led government ‘institutionalised’ corruption by introducing what is called a ‘performance related pay’ that perversely rewards the traffic police on duty 25 percent of the penalty amount. This scribe still vividly recalls what was telecast live on Kantipur TV a couple of years back. The channel was reporting live on the strike by metered taxi drivers against excesses by the traffic police.
When the interviewing journalist rebuked the union leader cheating passengers by tampering with taxi metres, the union leader had this to reply: “To recoup the bribe money, we have to tamper with taxi metres.” It sounds like we are living in a merry-go-round type of a corrupt world where everyone is cheating everybody, just for the sake of survival. This brings to mind the second strand of thought on corruption that goes by the name of ‘Collective Action Problem’. Here corruption is no more a problem at the individual level; rather it could even be a solution to the problem. Individually, both bribe takers and bribe givers benefit from a corrupt transaction; it is society that suffers. Corruption becomes everybody’s problem but at the same time, it is nobody’s problem. We end up with a perverted world where honest people are punished and wrongdoers rewarded. The ultimate harm is done to society in terms of erosion of social trust. It is extremely difficult to uphold the rule of law in a society in which trust is scarce.
Remedy or malady?
If corruption is such a confounding problem, what about anti-corruption? Rather than a remedy, anti-corruption can be a malady in itself. One should be mindful that anti-corruption campaigns can easily be launched to gag political opponents, score personal vendetta and discipline arrogant party members. Writing for the global anticorruptionblog.com, Nathan Sandals writes how aggressive anti-corruption enforcement can have a ‘chilling effect’ on both public and private investment, which in turn can have negative macroeconomic impacts. She cites the cases of China and Indonesia where economic growth rates have been retarded due to aggressive anti-corruption drives. In the case of China, due to a strong anti-corruption drive, there is now a slump in the markets for high-end, branded items. We may have a similar situation. Who knows, due to the fear of the CIAA investigation, bureaucrats may be reluctant to spend the budget funds.
However, what is more dangerous than the chilling effects of aggressive anti-corruption drives is the percolation of corruption in anti-corruption projects. Corruption can very easily come under the garb of anti-corruption. Recently, I was shocked to discover how a donor supported anti-corruption project had been co-opted from the very start. One can expect little from the complacent donors busy pouring aid money into anti-corruption drives. The sad part is that this has been going on for the last two decades or so.
Manandhar is a freelance consultant