CAUSES OF CORRUPTION IN PUBLIC SECTOR
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By Khalid Salahuddin*
Dr. Amanat Ali Jalbani**
SZABIST - Karachi

May 29 - June 06, 2004
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Corruption can be symptomatic of many social ills so the fight against it must be multifaceted. Laws and law enforcement are indispensable, but countries serious about fighting corruption should also reform government's role in the economy, especially in areas that (by giving officials discretionary power) are hotbeds of corruption. This paper has two goals. First, it lists a number of possible causes and consequences of corruption, derived from a review and recent study and second would be to suggest and recommendations to counter it helpful in bringing it under control. The study results signified not only the economic cause but also environmental causes.

Pakistan is a under developed country and there has been a continuous discussion about the progress and economic growth. Different perceptions are shared at national and international level relating to the causes of corruption.

The dilemma is that there is no one reason but numerous causes like poor transparency, unchecked economic or political power, weak legal system, bureaucratic red tapism and the most spoken about and major concern is corruption, in public sector.

The 2003 Corruption Perception Index (CPI) of Transparency International has ranked Pakistan at 92th among 102 countries surveyed. The CIP score relates to a perception of the degree of corruption as seen by business people, risk analysts and the general public.

Corruption has been patronized, promoted, and protected by those who hold the destiny of this nation in their hands resulting losses to the national exchequer. Awareness of the issue of corruption has existed in Pakistan, as evident from anti-corruption drives undertaken from time to time. Various rules and laws have been framed. However these initiatives have not been very fruitful.

The focus of this study will be the public service: a case study of public sector in Sindh. This article has two goals. First, it lists a number of possible causes and consequences of corruption, derived from a review and recent study and second would be to suggest and recommendations to counter it helpful in bringing it under control.

CORRUPTION: AN OVERVIEW

"Corruption" is a term whose meaning shifts with the speaker. But the common definition of corruption is "misuse of public power for private or political gain," recognizing that "misuse" must be defined in terms of some standard. Many corrupt activities under this definition are illegal in most countries for example, paying and receiving bribes, fraud, embezzlement, self dealing, conflicts of interest, and providing a quid pro quo in return for campaign gifts (Shani 2000)

Researchers at the World Bank estimate that worldwide bribery totals at least $1 trillion per year, just over 3% of world income in 2002 [Susan Rose-Ackerman1 2004]

However, pointing to the magnitude of the problem, it does not determine the solutions. Because of the diversity of circumstances that produce corruption and poor governance, it is difficult to propose global approaches. Estimates of costs and benefits are obviously only rough guesses. However, it is important not to overlook reform possibilities in this area.

CORRUPTION WITH REFERENCE TO PAKISTAN

The term corruption in relation to society finds no formal definition in the law of the land or for that matter, in any law of the world. Its dictionary meaning is "the perversion of anything form in original state of purity ". It will in that sense cover all evils-sins included. Irrespective of definition, it is as a phenomenon, or as a concept, familiar to all.

Corruption has been defined separately in different rules of the government books and varies in definition and terms included accordingly [S. Rehman 1979].

Various steps has been taken by the Government of Pakistan to eliminate the evil of corruption. It cannot be eliminated with without cooperation of both the public and the public office holders. President Musharraf's government has virtually lodged war on corruption. Good Governance and Corporate management has been introduced to bring more transparency and to achieve efficiency. The steps were much needed reforms and shall bear fruits.

During interview sessions the seasoned politicians praised the reforms, however, they were of the view that the pace of economic development needed to be geared up. It was also appreciated by them that working on development of institutions is being concentrated rather then individuals. Government wants to support democratic system and more openness but is surrounded by political pundits who restricts its free policies for personal reasons.

 

 

The Government Officers in there replies were very critical of the present system. The lower formation and middle level employees emphasized that corruption was and is a routine practice which is their need. Some officers narrated their personal experiences and provided comparison between the employees of private or semi-autonomous departments with pure public sector organization either productive and non-profit making bodies. They shared that they put in more working hours or equal and inspite of that their salaries are much lower then their counter parts.

Is is an established fact that the working environment and salaries in private government owned corporation are much higher then that of pure public sector organizations in Pakistan.

If we see it at international level even countries like Singapore pays more to the public servants then those employed in private sector for the simple reason as to make public service more attractive and efficient.

During interview with the journalists and media men they blamed the present system. They think that though government has been working towards economic developments and reformation of public sector but the entire exercise has gone a waste due to introduction of "devolution plan". There is no system now, nobody knows which office to go to, who to approach, so the corrupt makes more money. There is no Authority and duplicity is prevalent, destroying the entire mechanics and machinery of the government administrative systems.

Public review indicated that corruption has been more structured at the top level and money is being made by the top executives/public office holders. Since they (public) are more concerned with day to day workings involving interactions between government functionaries and public, in departments like license making authority, passport offices, police, excise, customs, income tax, utility departments so they feel the system has become more closed and complexed. There is no transparency as such providing ample opportunity for the corrupt to fill their pockets. The systems and procedures need to be simplified for easy understanding and accessibility of general public.

It is very widely believed that what ever the type of government is, corruption is there in public sector. There are two different but related types of corruption corruption involving high-level officials that often implicates multinational corporations or large domestic firms and corruption that is endemic to how the government carries out routine activities such as tax collection, customs, licensing and inspections. Corruption associated with public power, as known to us, can be categorized into the following four types:

i. Corruption more in the nature of extortion,
ii. Corruption in the form of payment of speed money
iii. Corruption in the form of bribery for avoidance of or for ignoring the violation
iv. Participating corruption where monetary gains or other benefits are mutually recorded.

CAUSES OF CORRUPTION IN PUBLIC SERVICE

After talking to the people concerned, mainly civil servants, it was found that the main causes of corruption in the country are summarized as under:-

ECONOMIC CAUSES

After independence national governments of the country had to undertake programs of economic development, resources available were scarce, goods and services had to be regulated/controlled and supplies to consumers and producers had to be rationed. With these regulations, came into existence, the system of permits licenses and quotas. This opened the doors of black marketing.

Black money was earned by unscrupulous black. This has repercussions over the behavior and morals of the people including the civil servants.

Government servants are undoubtedly paid low salaries which are not adequate for their subsistence. Rate of inflation had been galloping since the beginning of 1970's and the inflationary pressure had intensified to such a great extent that even the basic needs of daily life seem to be out of approach of common consumer [Corruption & Good Governance, Discussion paper].

The status and prestige of a person in society depends on his material position. Persons who lack these resources are looked down upon although they live an honest life. The following are some of the fields of manifestation of wealth in which the people in the society have to compete to live a respecble life:

 

 

i) exhibition of "dowry".
ii) purchase of golden ornaments.
iii) construction of palatial bungalows.
iv) use of new posh luxurious Cars.
v). Sending their children to private expensive schools with in and outside countries.

SOCIAL & OTHER CAUSES

There is no incentive for hard-work. There is a feeling that generally honest, sincere officials not get proper encouragement and appreciation but are sometimes subjected to sufferings and victimization on one or the other pretext. All this causes frustration and even good and honest officers go astray because they are ignorant of the philosophy of life and they do not realize that acts of honesty, integrity and hard work being good deeds are automatically rewarded which results in growth and development of man's oneself which is the sole purpose of life.

There is absence of a well conceived and high powered machinery for enforcing the norm of conduct of public functionaries in accordance with law and inquiries relating to complaints of maladministration. To protect and support a subordinate officer of the department although guilty is considered to be a virtue. Public complaints even though genuine are generally discouraged for the above reason. This gives encouragement to corrupt practices.

ABSENCE OF ISLAMIC DEMOCRATIC SYSTEM

The ideology, the constitution and the legal framework of the country provides Islamic democratic system of the government. In fact, a representative constitutional government committed to the rule of law has been in existence. Even while so, it has not in letter and spirit attempted to observe and strengthen the rule of law. The periodic absence or supper session of such an important organ of State has resulted in unsymmetrical growth of our 'political and social institutions, creating, imbalance in the distribution of power. Within the framework of State's authority it is the power of government, and outside it is the power of money which comes to be recognized and valued as the only thing worth having.

ABSENCE OF PARLIAMENTARY CONTROL

In a modern state, democratic action is possible only through the instrumentality of bureaucratic organism, yet bureaucratic power, if it is not properly controlled is self-destructive of democracy and its values. The Parliament which occupies the position of king-pin in any system of public accountability has not played its role in establishing or evolving institutions. The result is that the institutions have gone outside their defined jurisdiction and played role which does not belong to them.

ROLE OF ISLAM

The religion of Islam if followed in spirit and substance would be undoubtedly the best weapon in any fight against corruption in society. Unfortunately, due to general perversion of social value system, the tendency is otherwise. There are instances of encroachers and trespassers on government land erecting or establishing a mosque on a small portion of the trespassed property and obtaining social recognition condonation and protection for the wrong and its perpetuation against law enforcing agency, even though such a mosque interfere with a project.

PERSONALIZED ADMINISTRATION

The sub culture of the country including the administration is some what personalized rather than institutionalized. The result is that individual's success or failure comes to make or mar the institutions and systems. Every one looks to individuals rather than institutions or systems for improvement, redress or remedy. The laws are at times so framed as to have an individual in view, either directed against his vested rights or aimed at further entrenching his individual rights and privileges relegating the institution or system to an inconsequential or insignificant place. This attitude or tendency has the misfortune of encouraging personal loyalties of perpetuating it to the detriment of other higher values.

VALUES OF BUREAUCRACY

The bureaucracy must itself have a structural and a functional norm or value system to project and to observe. The Quaid-e-Azam in his talk to the Government officials (given on April 14, 1948) indicated:

"Each one of you will understand his own sphere of duly and responsibility and act with others harmoniously and in complete co-operation, keeping in mind that each has to do his duty within the spheres to which he belongs and further that you should try to create an atmosphere and work in such a spirit that everybody gets a fair deal and justice is done to everybody. And not merely should justice be done but people should (feel that justice has been done to them."

The top bureaucrats in particular, are unaware of their own Constitutional obligations. It is seen that either they are busy with their personal lives, paying least attention to their departments which results in inefficiencies and corruption.

INDISCIPLINE AND IRRESPONSIBILITY

Scope for corruption has increased and is increasing on account of indiscipline and irresponsibility allowed to continue unabated in government offices and establishments. Present office timing suits the subordinates (difficulty of transport, supplementing of income by part time jobs after office and the officer who can once on human plane show indulgence to his subordinates thereby suitably reducing his own office timing. It is the public and the public interest which suffers.

For obtaining ordinary information repeated contacts are made which results in paving the way for unfair means.

CLASS WAR

A highly potent and explosive transformation is taking place in our society. There are emerging two groups. One possessed of public power, or great wealth, now mostly both, and capable of using it recklessly to their advantage and to the detriment of those around them and the other larger group at the receiving end. The frustration and the cynicism is so great that with regard to corruption and abuse of authority, knowledgeable people consider the situation hopeless and talk of shooting a few hundred, may be a thousand suspected of such corruption, and others are talking of a bloody revolution, considering even such shooting not sufficient. It is therefore imperative that those wielding power should be effectively restrained and made publicly accountable and the second group be heeded by creating a bridge, by providing a forum, by creating an institution.

LACK OF TRANSPARENCY /OPENNESS

 

 

Mostly the government department do not allow information access, even the non-secret files are made moved secretly though its contents are only revealed when some body greases the palms of the dealing hand. It is seen that people whose matter in question is being dealt is kept ignorant about the progress of his case. Besides rules on the subject are not made public, they are not easily accessible such dealing destroy the bond of trust between the administrator and the administered.

ABSENCE OF MODERN TECHNOLOGY

Due to lack of technology or unwilling for new technology to be adopted the most of the government department have information piled in files lying without proper care or kept in untidy manner. To dig out or obtain such information the public has to run from pillar to post for retrieval of such information which is impossible to obtain without cooperation of the concerned officer which brings the seeker in contact with the desk officer and with whose favour only the required details would be provide.

PAY AND EMOLUMENTS

The pay structure of the Government servants is not according to the market rate. In spite of the fact that the government had increased their salaries still they are not in consistent with the present levels of inflation. The salaries in private sector are much higher.

WELFARE PLANNING

There is no system of welfare planning for the government officers. However some agencies like Pakistan army, navy, Karachi port trust and others have made arrangement for the welfare planning of their employees such as free or subsidized medical treatment, bonus payments on eid, allotment of residential accommodation/housing, allotment of plots etc. Such measure make public servant more comfortable as his other worries are taken care.

It is also worth pointing out that the Government servants leave rules are rigid. They do not have provision for compulsory annual leave. It seems that leave becomes discretionary of the department (Sindh Government leave rules). At times it is seen that public servants are refused leave on the pretext that no other substitute is available. Such refusal demoralizes the officers and their entire plans are ruined. If no substitutes are available then efforts be made to formalize a system in which such cases substitutes should always be there to replace. This will strengthen the notion and policy that every body is important and at the same time nobody is indispensable.

PERFORMANCE BASED SYSTEM

It is human nature to fight and compete when some merit prevails and your performance is linked to reward or other incentive. Absence of such system has made the performance of government functionaries slow and slag. The officers who are hardworking and meritorious find it discouraging and ultimately they all sale in the same boat.

POLITICAL INTERFERENCE

Among the above cited causes of corruption, in my opinion political interference is also the area of concern.

It is generally seen that when ever a that there is change of Government or change in the political leadership or even in key transfer and posting of Government Officials, the other officers reach out to seek their blessing for their transfers and posting either to there desired place or at the place or home town of that influence person. In return, either handsome amount of money has been paid as bribe or future commitment to sanction auctions/plots or others to his master. Virtually the relationship of master and slave is established and wrong doing is daily business (NASC).

BAR ON TRADE / EMPLOYMENT

The Government Servant is bared from employment during service. He is also not allowed to do private trade or establish partnership. If at all in public servant engages himself in such activity he is assumed to have violated the code of conduct (Sindh Government Conduct Rules).

In such a situation there is duplicity of law like professional categories of government servants like doctors they are allowed to hold private clinics after office hours only that there private practice allowance is deducted.

There is need to review the existing rules to allow public servant to be free so that he can look alternate opportunities to make his both ends meet.

CONSEQUENCES OF CORRUPTION

Given the costs of corruption and poor governance, reformers need to isolate the causes of these phenomena. Cross-country data permit one to obtain a broad overview of the underlying causes of corruption and weak governance. I have already mentioned the role of income and wealth as both a cause and a consequence of corruption.

Nevertheless, it seems possible to conclude, first, that poor governance contributes to low growth and to the other harmful outcomes noted above, and that weak underlying economic conditions facilitate corruption. The exception is a very poor country with weak institutions that is so badly off that there is little for anyone to steal.

Some studies find that trade openness and other measures of competitiveness reduce corruption.

Inequality contributes to high levels of corruption. In democracies in particular, inequality facilitates corruption, a result consistent with the state capture variant of corruption. The negative effect of inequality on growth may be the result of its impact on corruption taken as a proxy for government weakness cost-benefit ratios for other types of reforms will be distorted if they do not take corruption, self-dealing, and incompetence into account. Thus, the risks of corruption and weak administration need to be considered in assessing proposals, for example, to limit hunger, reduce violence, or improve education and health (You and Khagram 2004).

If top political figures themselves exploit their position for private gain, the effectiveness of government programs and the impact of foreign aid and lending suffer.

REMEDIES IN LAW (ANTI-CORRUPTION LAWS AND PROCEDURES)

The Governments has taken steps to penalize the corrupt functionaries and for such purpose laws and rules have been framed. Such issue laws are manifested to maintain check and balance system. The following are the laws provision existing :

LIST OF LAWS APPLICABLE

(i) Pakistan Penal Code 1860 Sections 161 to 166, 168, 217, 218. 403 to 409, 417 to 420, 465 to 468, 471 and 477A.
(ii) Prevention of Corruption. Act 1947 (Act II of 1947).
(iii) Pakistan Crimin1 Law Amendment Act 1958 (Act No. XL of I 958).
(iv) Federal Investigating Agency Act 1974.
(v) Sindh Enquiries and Anticorruption Act 1992
(vi) National accountability Ordinance 1999

LIMITATIONS OF THESE LAWS:

The following are the main defects in the enacted law in the procedure prescribed or followed there under, which have made their functioning unsatisfactory and disappointing. (S. Rehamn 1979)

(i) The entire field of corruption has not been fully covered by these laws
(ii) The procedure in the matter of detection and initiation of proceedings is too much dependent on the availability of complainant ready and willing to, sustain the prosecution at all stages.
(iii) The entire powers of putting the anti-corruption laws into effective operation are centralized in the authority of the Government,
(iv) This centralized power of the government is unguided, and uncontrolled by rules or requirement. of publication and without responsibility to any authority.
(v)
The Anticorruption Agencies are not fully equipped. in the matter of personnel, resources, in the matter of disciplinary control and in the matter of their functioning to discharge the heavy duties entrusted to them.

ANALYSIS

Research on the causes of corruption suggests ways to think about reform.

First, the purely economic prescriptions, taken alone, will not succeed either in promoting growth or in improving government performance.

Macro-economic policy prescriptions presuppose a well-functioning government, which is just what is lacking in corrupt countries. Similar problems of simultaneity exist for trade openness and inequality.

Thus proposals to improve governance by concentrating on economic growth, trade openness, and reductions in inequality beg the question of how weak states could accomplish such fundamental changes.

Some features of political systems seem to promote honest and effective government: high levels of economic freedom, parliamentary structure, certain types of electoral institutions, and avoidance of private capture of the state and of state capture of the economy.

CONCLUSION

It is widely believed that Corruption factor is very much there in public sector. It cannot be expected to whither away. As long as officials have discretionary authority, corrupt incentives will remain and can be especially harmful to fragile new states. Structural and procedural reform requires a set of credible anticorruption laws that outlaw whatever types of payments are viewed as illegal and establish punishments.

Both theory and practice suggest that there is no simple response that should be adopted across the board once the basic anticorruption statutes are in place.

The first step is to discover where corruption is imposing the greatest cost. There are several common possibilities:

Basic institutional reforms may be needed before particular sectors can be reformed. Especially important is improving the checks and balances in a political system.

If civil service wages are allowed to deteriorate relative to private sector wages and if pay differentials within the civil service are too small to give officials an incentive to seek promotions, then efforts to control official corruption are unlikely to succeed.

Reform policies must reduce the size of the civil service, pay decent base salaries and establish effective carrots and sticks that give officials incentives to be honest and perform efficiently.

The lack of credible institutions capable of hearing complaints and enforcing the law is a weakness of many developing and transition countries. Thus one area for reform should be to improve existing institutions.

RECOMMENDATIONS

In view of the foregoing position, the following suggestion are made for reduction of corruption for consideration:-

1) In spite of all the efforts made by the Federal Government, the country is still in the intense grip of inflation. Some more steps are needed to be adopted till new economic order of international level is suggested.

2) A conscious effort is needed to promote population planning. The attitude of people in general and civil servants in particular requires to be changed. They are to be convinced that population planning is not against religion. The prejudice should be broken down. The education program should also reach the masses by organizing Radio speeches, Television talks, group discussions and seminars etc

3) Special efforts may also be needed to maintain the integrity of independent institutions inside and outside government that play an important role in oversight, prosecution and judgment. Because of the interrelated character of corrupt systems, it is difficult to know where to begin a reform programme.

4) The benefit in salary be allowed to government servant irrespective of their promotion

5) Understanding and more emphasis be made on Islamic laws & practices in government business.

6) Openness of system is required. The government has to adopt policy of openness so as the public knows what is happening behind closed door.

 

 

7) Welfare projects like social security system be designed for public servants and their families so that they can feel protection. Such project be extended to retired employees too as it will enhance their quality of life.

8) Efforts are required to make Government functioning more transparent. All Government doings/Contacts etc be made public,

9) Use of Modern technology is essential which will enhance operational efficiency and bring transparency

10) Annual Leave for rest and recreation be introduced. It will provide chance to check the work of that particular seat by some other person.

11) Interdepartmental Committee for accountability be formed. It will enhance operational activity and reduce high handedness unnecessary delays.

*Khalid is working as Research Scholar at SZABIST - Karachi

**Dr Jalbani is working as Senior Faculty Member at SZABIST - Karachi

This research study is based on consultative exercise through primary and secondary sources. The survey method includes interview through a semi-structured questionnaires depending upon the nature & responsibilities of respondents. Statistics data has also been collected from respective anticorruption agencies in the province of Sindh. Discussions have also been held with the stake holders. Research is linked to following directions :

1. Management style in government organizations
2. Public Servants life style.
3. Salary structure.
4. Trends of cases registered against officers

In this regard interviews were conducted from:

a) Low paid employees, Gazetted & Non Gazetted Officers.
b) Accused public servants.
c) Investigators
d) Departmental heads.
e) Politicians.
f) Media personals
g) Citizens

Due to the sensitivety nature of the subject, many interviewees specially the politician and accused officer and even serving public servants promised for replies on the basis of anonymity, therefore their names have not been disclosed.

BIBLIOGRAPHY

BOOKS

Abdul Ghaffar Mian [1999], The Manual of Bribery & Anticorruption Laws, Orient Publishers, Irfan law book House Lahore

Hamid Ali and Zaka Ali [2001], ESTACODE, The Civil Establishment Code , Ideal Publishers Karachi

Krastev, Ivan, and Georgy Ganev. [2004]. "The Missing Incentive: Corruption,Anticorruption, and Reelection," in Jonos Kornai and Susan Rose-Ackerman, eds., Building a Trustworthy State in Post-Socialist Transition, New York: Palgrave.

Masudul Hasan Prof., Civil Services Law & Practice [1986], Law Publishing Company Lahore

Nisar Ahmed Advocate [1994], Departmental Enquiries against Government Servants, Mansoor Book House Lahore.

Pakistan Government, The National Anticorruption Strategy (NACS) 2002, NAB Islamabad Pakistan

Pakistan Government, National Accountability Ordinance [1999], Sindh Government Printing Press, Karachi

Pakistan Government, Prevention of Corruption Act 1947, Sindh Government Printing press, Karachi

Pakistan Government [1990], Pakistan Penal Code 1860, Lahore Law Times , Lahore

Punjab Government, Guide Book Of Anticorruption Est. Punjab [1985], Services-General Administration & information Department, Government Printing Press , Punjab, Lahore

Ray Zahid hussain, Pakistan Police Act [1861} with Police Rules [1987], Kyber Law Publishers, Lahore

Shahani P.K [2000], The Accountability Laws, Asia Law House Karachi

Sindh Government Civil Servants Leave Rules, Revised Edition [1993], Sindh Government Printing Press, Karachi

Sindh Government Administrative Reforms in Sindh [1973 amended up to 1997], Regulation Wing, Services & General Administration Department, Sindh Secretariat, Karachi

Sindh Government The Civil Servants Efficiency & Disciplinary rules [1973], Regulation Wing, Services & General Administration Department Sindh Government Printing Press, Karachi

Sindh Government The West Pakistan Civil Servants Conduct Rules [1966], Regulation Wing, Services & General Administration Department Sindh Government Printing Press, Karachi

Sindh Government Enquiries & Anticorruption Rules [1993], Anticorruption Department, Karachi.

S. Rehman Justice, Reprt of the Commission on Eradication of Corruption [1979]

JOURNALS/MAGAZINES

Corruption and Good Governance, Discussion paper 3, Management Development and Governance Division Bureau for Policy and Programme Support, United Nations Development Programme ,New York July 1997

La Porta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert Vishny 1999."The Quality of Government," Journal of Law, Economics, and Organization 15: 222- 279.

Susan Rose-Ackerman [2004], The Challenge of Poor Governance and Corruption Copenhagen Consensus Challenge Paper, Presented at United Nations.