CC BY
358
Драго Кос (Drago Kos1),
председатель Рабочей группы по борьбе со взяточничеством ОЭСР (Организации экономического сотрудничества и развития),
г. Любляна. E-mail: dragokos@gmail.com
Последствия коррупции
В статье автор пытается найти ответы на вопросы, почему коррупция считается пагубным явлением и можно ли количественно оценить её последствия.
Автору удаётся показать, что коррупция оказывает по-настоящему вредоносное воздействие, особенно в области экономической и социальной, а в некоторых сферах (инвестиции, налогообложение, государственные расходы, рост ВВП, ВВП на душу населения, число/ доля обучающихся в школах и средняя продолжительность жизни) это воздействие даже поддаётся количественной оценке. Едва ли можно и далее сомневаться во вреде, который наносит коррупция, поэтому автор подвергает отдельному рассмотрению доверие граждан своим правительствам — одно из самых важных последствий коррупции. Пассивность правительств в борьбе с коррупцией при отсутствии такого доверия может вызвать серьёзную реакцию со стороны граждан, что показала «арабская весна» и недавние события в некоторых балканских странах.
Автор приходит к заключению, что и правительства, и граждане должны осознавать истинный размер наносимого коррупцией ущерба, поскольку это стимулирует граждан вносить свою лепту в борьбу с коррупцией и побуждать правительства к тому, чтобы они рассматривали действительное подавление коррупции как один из своих основных приоритетов.
Статья на английском языке.
Drago Kos
Consequences of corruption
In his paper Consequences of Corruption the author tries to find answers to the questions why corruption is considered to be harmful and whether it is possible to measure its consequences.
The author manages to show that corruption has truly damaging effects, especially in the economic and social area and that some of the corruption effects (on investments, taxes, public expenditure, GDP growth, per capita GDP, school enrolment and life expectancy) can even be measured. Since there should not be any doubts any more on the damage corruption is causing, the author specifically deals with the trust of citizens towards their governments as one of the most important consequences of corruption. Governments' passivity in the fight against corruption might trigger serious responses from their citizens due to lack of trust, as it was the case in so-called "Arab Spring" and in some Balkan countries just recently.
The author concludes that both, governments and their citizens, have to be aware of the real extent of corruption damage since this motivates citizens to add their part of efforts in fighting corruption and incite governments to really accept suppression of corruption as one of their top priorities.
I. Introduction
Ordinary people and top experts argue that problem. They all agree that corruption is legally
corruption is a dangerous phenomenon, which and - in some countries - also ethically prohibited
causes damage but when asked what kind of damage but they do not know an answer to a very simple
and how it can be measured, they all encounter same question, why is really so harmful.
1 Drago Kos is Chair of the OECD Working Group on Bribery.
Serious research has been conducted already and its results show that corruption is causing a lot of damage that can be measured, mainly in the economic and social area. In addition, there is also a consequence of corruption that cannot be directly measured, but it might be even more important than its consequences in the economic and social field. That is its relation to the trust in a given society. Beside many other things, trust among citizens and their trust towards their governments is something, which is also to a large extent a consequence of corruption in a given country. The level of trust does not have repercussions in the special anticorruption area only but it can go much further. Different surveys show that government inactivity in the anti-corruption area might also lead to political, social and national instabilities.
Therefore, this text is dealing with two closely related issues, consequences of corruption and its relation to trust. Economic and social consequences of corruption do not need any specific introduction. Contrary to that, relation between corruption and trust will require some more introductory efforts, which seems strange since this relation is a very obvious one per se but sometimes it seems that only citizens - and not also their political leaders -understand that.
II. Economic consequences of corruption
The first area where corruption is causing very important consequences is the economic one. If it can be proven that corruption is damaging our national or even our personal budgets, than we would understand immediately why it is so dangerous and why we have to fight it with all means2. When analyzing economic consequences we can also answer another important question: is it possible to measure the damage caused by corruption? If the answer is positive, we do not need any additional proof that corruption is really harmful and we can even predict what will happen in societies, which do or do not want to fight corruption. As all other social phenomena, corruption is causing direct and indirect consequences and this is also the case for the economic field.
II.1. Direct economic consequences of corruption
These are the consequences, which can be measured and analysts have established that the
2 Of course, keeping in mind that by fighting corruption we should not cause additional - or even larger - damage - we should never forget the basic principles in the areas such as human rights, etc.
following damage caused by corruption can be mathematically assessed3:
> Decrease of investments: 1 index point increase of corruption in a given country causes 2,5 (2,9/4,5) percentage points decrease of investments in the same country;
> Increase of the tax rate (= decrease of FDI): 1 index point increase of corruption causes 7,5 percentage points increase of the tax rate;
> Reduction of public expenditures: 1 index point increase of corruption causes 1,3 - 3 percentage points decrease of public expenditures;
> Reduction of the GDP growth: 1 index point increase of corruption causes (in average) 0,13 percentage points decrease of the GDP growth, whereby in the following countries they can expect the following average yearly reduction of the GDP growth in percentage points: Liberia -1,66, Indonesia - 1,17, Russian Federation - 0,55, Saudi Arabia - 0,55, United A. Emirates - 0,39, Kazakhstan - 0,34, Ukraine - 0,24, India - 0,11.
> Decrease of the GDP per capita: 1 index point increase of corruption causes (in average) 425 $ decrease of the per capita GDP, whereby in the following countries they can expect the following decrease of the GDP per capita: Liberia - 1363 USD, Indonesia - 964 USD, Russian Federation - 452 USD, Saudi Arabia - 452 USD, United A. Emirates - 319 USD, Kazakhstan -281 USD, Ukraine - 195 USD, India - 91 USD.
Fortunately corruption levels, except in special circumstances such as wars or serious civil disorders, do not change very rapidly and certainly not at the level of index points. Also the consequences mentioned above do not happen at once but take longer period. Still, eventually consequences happen and then the series of events in a given country might be triggered - first by the governments and, in their absence, by the population. If governments do not try at least to deal with the above mentioned consequences, their citizens will instead. But usually they do it in much more energetic ways, which already belong to the matter of trust, also discussed in this article.
II.2. Indirect economic consequences of corruption
In addition to direct, measurable effects on economy, corruption is also indirectly influencing the economy. Sometimes this influence is even
3 Although these are surveys from around 10 years ago they still give a very good idea why corruption is harmfull.
more important than the direct since it consists of
the following consequences:
> Increase of income inequality: when corruption is flourishing, quality and quantity of products and services are not important anymore - it is the amount of the bribe, which decides and as a consequence a small number of people get everything and others less and less;
> Increase of aid per capita inflows: since countries are getting poorer, they need more and more foreign assistance;
> Misallocation of resources and talents: the laws of economy do not function anymore and resources and talents are shifting not to economically expected areas but to areas, which - due to the extent of bribes paid - gain most of the profits;
> Change in the structure of public expenditures: in order to mitigate negative effects of corruption and to decrease the public pressure, governments are forced to spend more money in the socially sensitive areas, such as healthcare, education, etc
> Decrease in public revenues for essential goods/ services: public officials do not care for the public revenues anymore, all they are interested are their personal "revenues";
> Lower productivity and innovative thinking: it does not make sense anymore to produce more or to produce new things, what is important is how to get to the higher bribe;
> Increase of shadow economy: since market laws are simply not functioning anymore and people cannot survive through their legal economic activities, they are forced to start earning needed basic income through different forms of moonlighting,
> Disadvantages for exporters from less corrupt countries in highly corrupt import countries: exporters from less corrupt countries simply do not know how to make business in a highly corrupt environment4;
> Reduction of competition5 and efficiency: as mentioned above, quality and quantity of products and services and their prices are not important anymore - it is the amount of the bribe, which decides;
> Favoring of inefficient producers: as long as they are willing to pay higher bribe.
It is obvious that corruption already in the
economic area alone has devastating effects. Nothing
4 Although these are surveys from around 10 years ago they still give a very good idea why corruption is harmfull..
5 Although they usually adopt very fast!
functions anymore and government cannot embark on a meaningful economic development. Rules, which in other countries function almost invisibly, in a corrupt country are twisted and no one can predict what the final results of the combination of those twisted rules are. But what is sure is the fact that if no one even tries to tackle corruption, national economy might get into serious troubles and even crumble at the end.
III. Social consequences of corruption
As mentioned earlier, corruption is harming economic area and our every day's lives. But despite the fact that economic consequences of corruption are sooner or later being felt by each individual living in a certain society, it is corruption's harmful effect on the social relations, which usually makes people extremely sensitive and willing to react - sometimes even very abruptly - against it but also against those who, although authorized and empowered to do so, do not do anything to at least try to curb it. Among the social consequences, the following ones have been identified as the most important ones:
> Misguided and unresponsive policies and regulations: in the absence of functioning market and legal rules governments simply do not know what to do and where to step in;
> Lower acceptance of public institutions: since public institutions are either corrupt or ineffective, citizens simply do not accept them as their own institutions anymore;
> Reduced number of quality public sector jobs: there are simply no resources left to enable governments to offer proper payment for even the most important public functions;
> Poor performance of public sector: with low salaries and lack of proper orientation concerning the priorities, public sector cannot fulfill its expected role;
> Exacerbated poverty and inequality: only a small number of corrupt individuals have enough, the rest of the people have to struggle to survive;
> Reduced school enrolment (1 index point increase of corruption causes 5 percentage points decrease of school enrolment): due to increased costs in other more important areas6, people do not have money to pay costs of education for their children;
> Reduced life expectancy (1 index point increase of corruption causes 2,5 years decrease of life expectancy): the quality of life is deteriorating and people are forced to spend money, if they have it at all, for low quality products and services, not
6 Although (in theory) competition can erode excess profits.
being able to afford themselves real quality even in the most important areas7;
> Undermined rule of law: legal rules are not important anymore, what counts is the amount of bribes;
> Hindered democratic, market-oriented reforms: in the absence of any solid market and legal rules it is impossible to embark on the reforms, since nobody knows where to start and where to go;
> Weakened political stability: people do not trust their governments anymore8;
> Increased crime rates: in the environment where it is difficult to survive economically, predatory behavior gains the importance;
> Biased decision-making: slowly, all decisions in a given society adjust to the new reality, where getting rich through accepted bribes in the shortest possible time becomes an absolute imperative;
> Infringed civil and political rights: when decisions made are biased and do not take into respect anything but their lucrative potential, civil and political rights simply do not matter anymore;
> Infringed fundamental right to fair treatment: this is the essence of corruption: people are bribing other people to ensure illegal and unfair preferential treatment.
Social consequences of corruption add additional layer to already heavy disturbances caused by economic consequences. Not only that living conditions are objectively getting worse, people start to get subjectively aware of that since they are more and more limited in what they can do. They begin to understand that there must be something wrong in their society, where only few can afford access to best healthcare institutions and to best schools, while the rest is struggling for their daily survival. And even if they try to do something to improve their living conditions, they cannot pass by their corrupt public administration - no complaints will be responded to, no criticism will found the fertile ground and no demands will be taken into account. As a consequence, people will start to ask the ability and motives of their government, they will start to get very upset with it and soon they will lose all the confidence in it.
IV. Corruption and trust
Having in mind consequences of corruption, widespread evidence and numerous historical examples, which clearly demonstrate that citizens'
7 Food, medicines,..
8 Healthcare,...
trust depends, to a large extent, on the governments' actions to fight corruption, there are still those politicians holding power, who either leave the prevention of corruption to be done by technical experts without adequate political support, or who even hinder the anti-corruption activities to protect themselves or their political allies. This is particular risky during the periods of major economic or social turmoil that many governments experience, as has been the case for a number of Arab governments in recent years, as well as for two governments -Slovenian and Bosnian-Herzegovinian - from the Balkans.
If politicians were to take a look at what scientific research shows, they would immediately notice a few very simple observations:
> More corruption in a country means lower levels of citizens' trust, especially the trust level in government is very low,
> A greater degree of citizen trust means less corruption in a country.
Based on these findings, it would be most reasonable to conclude that less corruption in a country would immediately and automatically lead to greater levels of citizen trust, but the issue is unfortunately not so straightforward. The relationship is neither direct nor automatic.
The question is, of course, whether governments across the world - for whatever reason - realize how important the level of citizens' trust is. They certainly talk about it a lot, occasionally even directly ask citizens for their trust, but in most cases they only really want their trust during election time as it has a direct bearing on the number of electoral votes. They might even consider doing this in times of crisis as we experienced in this last economic crisis. However, even in the most affected European countries, it has not been possible so far to detect any specific anti-corruption activities, where the positive consequences of government actions would most swiftly reflect and straightforwardly impact greater levels of citizens' trust that is sorely needed to overcome the crisis swiftly and effectively. Thus, with a relative degree of confidence, we can argue that governments are not really serious in considering, let alone implementing, concrete anticorruption activities. They behave as if their citizens would without any hesitation or opposition accept any level of corruption, or even the worst austerity measures, increased taxes, catastrophic unemployment, etc.
V. How to improve citizens' trust with anticorruption measures?
We indicated earlier that the link between low levels of corruption and the greater degree of citizens' trust is neither direct nor automatic. However, this does not mean that it is nonexistent. The successful fight against corruption exerts a positive impact on a range of things such as economic conditions, transparency, accountability, non-discrimination, meaningful participation, legal and economical equality, all of which are conditions that are very important for the citizens of every country. Any improvement in these areas improves citizens' views that their government genuinely cares about them, which is reflected in their trust level.
Direct and indirect consequences of corruption, which were described in previous chapters directly and negatively impact citizens' trust. Therefore, it is only natural to ask: if the effective prevention and fight against corruption with its negative effects could have an extremely positive impact in all areas we can imagine, including the area of trust, why do some governments neglect those activities or even despise them?
The answer to this question is not overly complicated either: while citizens and society as a whole benefit from the consequences of the efficient fight against corruption, it is immanent in corruption that it only benefits an individual or a narrow circle of individuals who obviously do not have the slightest interest in benefiting anyone but themselves. And if those individuals are in power, we can clearly imagine the consequences of such behavior. The best examples of this type of individual are the dictators of the not-so-distant history, who at the expense of their citizens managed to pour billions of dollars and euros from state funds into their private pockets. How this altogether ends is also known, most recently manifested in the "Arab spring" events, and caused entirely by that "tiny thing" called the lack of trust.
Efficient fight against corruption demands considerable amounts of energy, resources and time from politicians, nonetheless, there exists a rather "simple" shortcut, which can at least for a time decisively increase the level of citizens' trust. This shortcut, called by theorists "legal equality for all" and by ordinary citizens "bad guys behind the bars", means nothing more than politicians properly influencing executive and judicial9 branches of power and making sure that once untouchable individuals become subjects of police investigations, prosecution indictments and convictions. And if this happens,
9 See Chapter IV.
citizens will understand that the legal system functions and names and positions of those suspected are not important (any longer). This may even lead citizens to begin respecting their politicians. Of course, this respect will only be short-term, if these basic measures are not accompanied by long-term efforts in the fight against corruption. Unfortunately, governments that do not have any serious interest in fighting corruption, do not use even these shortcuts. Since it is absolutely not a problem for their citizens to easily identify members of those governments, they will sooner or later have to face the consequences of their passivity and, the least, they will only lose elections.
VI. Conclusion
There should be no doubts anymore that corruption is harmful and that its harmful effects in certain areas can even be measured. Talking about its damaging consequences has scientific grounds for long years already. Leaving aside the attempts of the corrupt individuals, who in the same way as they are trying to avoid any discussions on their own corruptibility, are simply trying to avoid meaningful, reasonable and grounded debates on corruption and its consequences, much more could be done in raising not only awareness but also knowledge of citizens. If they would not only feel but also really know how bad corruption is and why, this might even increase their responsiveness to it and they might even start to get involved massively and actively in the fight against it.
There would also be no harm if governments would set aside some of their busy schedules and learn what they directly or indirectly cause by not fighting corruption. Of course, some of them do not care but majority of them do not become really engaged because they simply underestimate the extent and the seriousness of harmful corruption consequences. They for sure understand it is bad, but they do not know how bad it really is. And, therefore, they do not feel the pressing need to do anything meaningful against it. And this is also why they are surprised when they realize that the trust of their population in their work has decreased significantly. Suppressing corruption by every government is not only the task due to accepted international obligations, due to their preelection promises or due to their desired popularity. It should be governments' priority task because corruption is harming their citizens and destroying their societies and we can only hope, that sooner or later all governments will realize that it is better for them and for all of us to suppress corruption.
Sources
1. Bose, Niloy, Capasso, Salvatore, Murshid, Antu Panini
(2007), Threshold effects of corruption: theory and evidence, World Development Vol. 36, No.7 (pp. 1173-1191),www.elsevier.com/locate/worlddev;
2. Carr, Indira, Outhwaite, Opi (2008), Surveying corruption in international business, Manchester Journal of International Economic Law, Vol. 5, Issue 2 (pp. 3-70);
3. Dreher, Axel, Herzfeld, Thomas (2005), The economic costs of corruption: a
4. survey and new evidence, Thurgau Institute of Economics, Switzerland;
5. E. M. Uslaner: Trust and Corruption, Corruption and the New Institutional
6. Economics, London, Routledge 2004;
7. Evans, Bryan R., The cost of corruption, Tearfund -Christian action with the
8. world's poor, Teddington, UK;
9. Guerrero, Manuel Alejandro, Rodriguez-Oreggia, Eduardo
(2008). On the 6.
10. individual decision to commit corruption: a methodological complement, Journal of Economic Behaviour & Organization. Vol. 65 (2008) (pp. 357-372);
11. Ivanchevich, John M., Konopaske, Robert, Gilbert, Jacqueline A. (2008).
12. Formally shaming white-collar criminals, Business Horizons (2008) 51 (pp. 401 - 410), Kelley School of Business, Indiana University;
13. Kingston, Christofer (2007). Social structure and cultures of corruption, Journal of Economic Behaviour & Organization 67 (2008), (pp. 90-102), www.elseviere. com/locate/econbase;
14. Rothstein, Bo (2007). Anti-corruption - a big bang theory, The Quality of
15. Government Institute, ISSN 1653-8919, Gteborg University, G teborg;
16. Sullivan, John, Shkolnikov, Alexandr (2008). The costs of corruption,
17. Democracy around the world, www.america.gov/st/ democracy;
18. Torgler, Benno, Schneider, Friedrich (2008). The impact of tax morale and
19. institutional quality on the shadow economy, Journal of Economic Psychology (2008), doi:10.1016/j. joep.2008.08.004.
