Corruption
In 1994, the German Parliamentary Financial Commission in Bonn presented a comparative study on legal corruption in industrialized OECD countries. They reported that foreign corruption was often legal while domestic corruption was prosecuted. This distinction created a framework where bribery could be treated as a tax deduction for business expenses if certain conditions were met. Political corruption occurs when an office-holder or other governmental employee acts in an official capacity for personal gain. Historically, the word had a broader meaning concerned with an activity's impact on morals and societal well-being. For example, the ancient Greek philosopher Socrates was condemned to death in part for corrupting the young. Contemporary corruption is perceived as most common in kleptocracies, oligarchies, narco-states, authoritarian states, and mafia states. However, more recent research and policy statements acknowledge that it also exists in wealthy capitalist economies. In How Corrupt is Britain, David Whyte reveals that corruption exists across a wide range of venerated institutions in the UK. It is ranked as one of the least corrupt countries by the Corruption Perceptions Index. A number of indicators and tools have been developed which can measure different forms of corruption with increasing accuracy. When those are impractical, one study suggests looking at bodyfat as a rough guide after finding that obesity of cabinet ministers in post-Soviet states was highly correlated with more accurate measures of corruption.
The Kaunas golden toilet case was a major Lithuanian scandal. In 2009, the municipality of Kaunas ordered that a shipping container be converted into an outdoor toilet at a cost of 500,000 litai. This amount equaled around 150,000 euros. It required 5,000 litai or 1,500 euros in monthly maintenance costs. At the same time when Kaunas's Golden Toilet was built, Kėdainiai tennis club acquired a very similar but more advanced solution for 4,500 euros. Because of the inflated cost, it was nicknamed the Golden Toilet. Despite the investment, the facility remained closed for years due to dysfunctionality. The group of public servants involved received various prison sentences for recklessness, malfeasance, misuse of power, and document falsifications in a 2012 court case. They were cleared of their corruption charges and received compensation, which pushed the total construction cost and subsequent related financial losses to 352,000 euros. On the 7th of July 2020, the Carnegie Endowment for International Peace released a report claiming Dubai was an enabler of global corruption. The city was called a haven for trade-based money laundering as it gives space to free trade zones with minimal regulatory laws. A report in September 2022 revealed that British Members of Parliament received a total of £828,211 over eight years from countries of the Saudi-led coalition in the Yemeni Civil War. MPs also received gifts including a £500 food hamper, tickets for a Burns Supper, an expensive watch, and a day out at the Royal Windsor Horse Show.
Judicial corruption refers to the corruption-related misconduct of judges through receiving or giving bribes or improper sentencing of convicted criminals. An example of prosecutorial misconduct occurs when a politician or crime boss bribes a prosecutor to open investigations against an opposing politician. Governmental corruption of the judiciary is broadly known in many transitional and developing countries because the budget is almost completely controlled by the executive. Military corruption refers to the abuse of power by members in the armed forces for career advancement or personal gain. One form of military corruption in the United States Armed Forces involves soldiers being promoted due to race, sexual orientation, ethnicity, gender, religious beliefs, social class, or personal relationships rather than merit. In addition, US military officers have had instances of sexually assaulting fellow officers where attacks were covered up and victims coerced to remain silent. Police corruption is a specific form of police misconduct designed to obtain financial benefits or career advancement. A common form is soliciting or accepting bribes in exchange for not reporting organized drug rings. When civilians witness police brutality, officers often respond by harassing and intimidating witnesses as retribution. Whistleblowing is not common in law enforcement because officers who do so face reprisal such as being fired, transferred, demoted, shunned, or losing friends.
Following an Unbundled Corruption framework, Yuen Yuen Ang describes using the analogy of drugs to explain economic effects. Petty theft and grand theft are like toxic drugs that directly hurt the economy by draining public and private wealth while delivering no benefits. Speed money is akin to painkillers that may relieve a headache but does not improve strength. Access money is like steroids that spur muscle growth and allow one to perform superhuman feats but come with serious side effects including the possibility of a complete meltdown. Some experts have suggested that corruption stimulated economic growth in East and Southeast Asian countries. An often-cited example is South Korea where President Park Chung Hee favored a small number of companies. Later he used this financial influence to pressure these chaebols to follow the government's development strategy. This profit-sharing corruption model incentivized government officials to support economic development since they would personally benefit financially from it. One neglected example of high growth with corruption is the American Gilded Age which Yuen Yuen Ang has compared to China's Gilded Age. In both cases corruption evolved over time from thuggery and theft to more sophisticated exchanges of power and profit resulting in unequal and risky growth.
The Foreign Corrupt Practices Act was enacted in 1977 as an early paradigmatic law for many western industrial countries. It moved the principal-agent approach back where mainly the victim and a passive corrupt member were considered rather than the active corrupt part. Unprecedented, the law directly condemned active corruption particularly in international business transactions. As early as 1989 the OECD established an ad hoc Working Group to explore concepts fundamental to the offense of corruption. Based on the FCPA concept, the Working Group presented the OECD Anti-Bribery Recommendation in 1994. The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions was signed in 1997 by all member countries and came into force in 1999. In 2007 Siemens was convicted in the District Court of Darmstadt of criminal corruption against the Italian corporation Enel Power SpA. Siemens had paid almost €3.5 million in bribes to be selected for a €200 million project partially owned by the government. The deal was handled through black money accounts in Switzerland and Liechtenstein established specifically for such purposes. Because the crime was committed in 1999 after the OECD convention had come into force this foreign corrupt practice could be prosecuted.
The Corruption Perceptions Index ranks countries by their perceived levels of public sector corruption determined by expert assessments and opinion surveys. The index has been published annually by Transparency International since 1995. On the supply side Transparency International used to publish the Bribe Payers Index but stopped in 2011. The Global Corruption Index covers 196 countries and territories measuring the state of corruption and white-collar crimes around the world. It measures three forms of government corruption across the executive branch, judiciary, military, police, and legislature including bribery, improper influence, and misappropriation of funds. The Unbundled Corruption Index measures perceived levels of corruption in four categories: petty theft, grand theft, speed money, access money. It uses stylized vignettes instead of broadly worded survey questions. Corruption of the rich is particularly hard to measure and largely excluded from conventional metrics like the CPI. George Monbiot criticized the CPI for its narrow definition that surveys mostly only Western executives about bribery. Others point out that global metrics systematically under-measure corruption of the rich which tends to be legalized institutionalized and ambiguously unethical as opposed to corruption of the poor.
Transparency with public access to reliable information could reduce the problem. Djankov and other researchers have independently addressed the role information plays in fighting corruption with evidence from both developing and developed countries. Disclosing financial information of government officials to the public is associated with improving institutional accountability and eliminating misbehavior such as vote buying. Any extrinsic aspects that might reduce morality should be eliminated. A country should establish a culture of ethical conduct in society with the government setting the good example to enhance intrinsic morality. Creating bottom-up mechanisms promoting citizens participation and encouraging values of integrity are crucial components of fighting corruption. As of 2012 implementation of Advocacy and Legal Advice Centres in Europe led to a significant increase in citizen complaints against acts of corruption received and documented. The United Nations Convention against Corruption provides a common guideline for countries around the world. Both Transparency International and the World Bank provide assistance to national governments in terms of diagnostic and design of anti-corruption policies. Rwanda in the last decade has made tremendous progress in improving governance and the business environment providing a model to follow for post-conflict countries. Armenia aims to achieve zero corruption through raising awareness on societal hazards.
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Common questions
What is the definition of political corruption according to the text?
Political corruption occurs when an office-holder or other governmental employee acts in an official capacity for personal gain. The word historically had a broader meaning concerned with an activity's impact on morals and societal well-being.
How much did the Kaunas golden toilet case cost in euros?
The total construction cost and subsequent related financial losses reached 352,000 euros after public servants received compensation. The initial order required 150,000 euros while monthly maintenance costs equaled 1,500 euros.
When was the Foreign Corrupt Practices Act enacted and what did it do?
The Foreign Corrupt Practices Act was enacted in 1977 as an early paradigmatic law for many western industrial countries. It moved the principal-agent approach back where mainly the victim and a passive corrupt member were considered rather than the active corrupt part.
Who publishes the Corruption Perceptions Index annually since 1995?
Transparency International has published the Corruption Perceptions Index annually since 1995. The index ranks countries by their perceived levels of public sector corruption determined by expert assessments and opinion surveys.
What are the four categories measured by the Unbundled Corruption Index?
The Unbundled Corruption Index measures perceived levels of corruption in four categories: petty theft, grand theft, speed money, and access money. It uses stylized vignettes instead of broadly worded survey questions to assess these forms.