CORRUPTION Across India, China & Indonesia. POLITICIANS Need the FUNDS - PATRONAGE NETWORKS & Others REWARD Nearest & Dearest a LAVISH LIFESTYLE

The most famous pronouncement attributed to Lord Acton (1834–1902) a British historian - “Power tends to corrupt, and absolute power corrupts absolutely” often left out the last part “Great men are almost always bad man”.

The great men must be the modern day politicians who bend the laws of the land and steal money or solicit bribes because they need the funds to support networks of patronage. Others do it in order to reward their nearest and dearest or to maintain a lavish lifestyle when their political lives are over.

The context in which Lord Acton made this pronouncement has nothing to do with the “corruption” as we understand it nowadays. He did it during the great crisis in the Roman Catholic world over the promulgation by Pope Pius IX of the dogma of papal infallibility which he opposed but could not avert the Old Catholic separation.

Sociologists usually define power as the ability to impose one's will on others, even if those others resist in some way. When you think of power you think of, say, nuclear energy, or solar energy - but TRUE POWER is the creative energy within men's MINDS that allows them to use such powers, such energies, and such forces.

The true power is in the imagination which dares to speculate upon that which is not yet. The imagination, backed by great expectations, can bring about almost any reality within the range of probabilities.

We must get back in touch with our own power to reinforce our own strength, for ultimately the magic of our being is well equipped to find fulfillment, understanding, exuberance, and peace.

And in our country what we are witnessing now is the legend of Robin Hood – “robbing the poor” to help out the rich and well connected in power. There is no a moral justification for the government to do so.

If the cost of doing things is above board without all the leakages, concessions, licences, permits, assets privatized, tenders awarded etc, the cost of living would be much lower. We do not want those scabs who gained their fortunes by political pull, by having government grant those favors and franchises at the expense of their fellow-men
When will the breed of politicians be born, not greedy, conscientious and honest, and made every effort for businessmen to invest not only to earn a reasonable return, but to achieve their fortunes by economic means -- through production and trade and create the wealth to share with others.

So what is the choice? – follow Pak Lah and possibly risk economic stagnation but with some fulfillment or hope that the benefits of growth exceed the cost of corruption (without any table!). A balance approach perhaps.

The wages of corruption ;By Chan Akya

"In India, corruption is under the table. In China, it is over the table, while in Indonesia corruption includes the table," it has been said. People might quibble about the relative placement of Asia's three largest countries. Depending on direct evidence of paying off government officials, and the nationalities of those making the payments, the temptation to reclassify stands quite broad.

Whichever way you wish to read the quote, what remains undeniable is that corruption is more firmly rooted in Asian culture than is commonly acknowledged. Western views of Asia are misshapen by their experiences in places like Singapore and Hong Kong, and all too often ignore the realities of doing business elsewhere. I will look here at the three countries mentioned in the above quote, in the order they are mentioned.

INDIA -In India corruption is almost entirely a post-'70s phenomenon, with the country's politicians at the epicenter. While bureaucrats are also corrupt, they have derived strength from their political masters - indeed those working for relatively honest politicians are demonstrably less corrupt than the average, as well as being unhappy, presumably.

History is not kind to either the Congress party or its nemesis, the Bharatiya Janata Party (BJP). The Congress that exists today is the creation of the late prime minister Indira Gandhi in the 1960s. Even as Indira Gandhi herself may not have taken bribes (opinion in Delhi is mixed on the subject), she was megalomaniacal enough to have interfered in the bureaucratic machinery all too often, a process that peaked with her declaration of a state of emergency in the mid-'70s.

In turn, the centralization of power created an army of sycophants who promised access to Gandhi, usually for a monetary consideration, but also sometimes through the creation of jobs in favored electoral constituencies. The sycophants were tolerated by Gandhi as they served her political purpose of splitting the opposition parties, the success of which can be measured by the short-tenured government that defeated her by a landslide in 1977. In the '80s, the process intensified within the Congress, with the Bofors scandal causing the government of Rajiv Gandhi to collapse at the hustings in 1989.

Meanwhile, the opposition fared little better. The BJP, espousing Hindu nationalism, had always been funded by small businesses, which hoped to derive some sops in the form of tax collection gigs. The rest of the political spectrum is quite diverse, and I believe that its very plurality is a cause for corruption increasing. Anti-incumbent voting is rampant in both federal and state elections, causing many political parties to accelerate their collection of bribes rather than take a longer-term view.

Second, the composition of political parties is ever-changing. For example, the success of caste-based political parties in the north has resulted in a substantial increase in corruption, presumably to pay for mounting election expenses. Corruption is presented by such parties as a redistribution of income from upper castes to elected members of the lower castes, although I very much doubt that much munificence to caste-mates results from such bribes.

As with Indian reforms, the outlook for legislative tightening in this area appears quite limited. For one thing, no political party in power now is clean, which means that any effort to rein in corruption would face internal opposition. As a wag once observed, no one in the Congress would propose the death penalty for corruption, as that would mean hanging their members of parliament.

Indians do not have a choice when it comes to corruption as most of their political parties (with the notable exception of the communists) offer simply varying levels of corruption. The choice is therefore to vote for the communists and risk economic stagnation like Bengal, or vote for another party and hope that the benefits of growth exceed the cost of corruption.

CHINA - Return of the eunuchs
If India's plural democracy has pushed corruption ahead; China's one-party state has not done much better. Ever since Deng Xiaoping issued his "to get rich is glorious" edict, the party has seized on many opportunities to make money. Whether it is the People's
Liberation Army (PA), whose suite of businesses rivaled any Western conglomerate (until president Jiang Zemin cracked down late in the '90s) or local party officials whose fingers appear in every urban development, taxpayers' money has been illegally channeled into the hands of politically connected individuals.

Additionally, the secondary costs of corruption such as bad loans cannot be calculated at the present juncture. This is best illustrated by looking at the history of some of the country's high-flying bankers and businessmen, many of whom have come to grief as reports of their wealth spread. The golden rule in China is to avoid being named, which
would usually cause the party to investigate and quickly judge the official. One thing I have noticed though is that higher-ranking officials usually demand more long-term benefits such as joint venture projects and education or job advancement opportunities for their children as compared with lower-ranking officials who are mainly preoccupied with cash.

Culturally, the Taoist framework of self-maximization has much to do with corruption in China. In contrast with the Confucian principles that call for officials to act for the common good, Taoism recognizes the need and right of individuals to act for their own benefit. This allows Chinese people to accept the need for officials to enrich themselves, and, indeed, many see the richer as more successful. This is why corruption is quite open and direct; you can almost predict what any particular activity will cost.

Another feature that merits attention is the changing qualifications for becoming an official in China. Aspiring civil servants used to undergo a series of grueling examinations; passing them guaranteed jobs in government. Under that system, the most corrupt officials were usually palace eunuchs, whose resurgence from time to time has spelt the end of many regimes. With no central tests (which were only scrapped in the early 1900s), today's officials derive much of their power from party politics, which is really another way of saying palace intrigues. In effect, today's politics in China are more representative of those practiced by the eunuchs, which is why I fear that the corruption epidemic will only intensify in years to come.

INDONESIA - Wayang puppets
Javanese kings always ruled through a combination of intrigue, superstition and selective rewards. This placed them on the same level as a dalang (puppeteer) in a wayang kulit (shadow puppet show), carefully controlling the movements of various puppets and introducing surprise changes to the script depending on the audience reaction. The
last of the great "dalangs" was Suharto, whose use of his country's talented Chinese community reflected a genuine marriage of convenience.

In return for effective management of resources which gave them money, Chinese businessmen supported Suharto's family and addressed their financial needs. Their lack of a power base locally meant that they could never stray too far from the family. This is the context in which the proverb opening this article was made.

The arrival of democracy has resulted in greater corruption as each successive ruler has sought to cement his or her grip on the populace. While the people were promised less concentration of wealth to undo some of the ills of the Suharto era, this has been more difficult to implement due to the changing legal and political environment.

Meanwhile, the stagnation of investment has meant greater pressure on the government even though Indonesia, being a resource-rich country, has much to offer in the current environment of soaring commodity prices.

With the businessmen of old refusing to cede control and a whole host of new players from the West and the Middle East arriving at the country's doorsteps, corruption has become endemic. The search of the next dalang is on. In the meantime, budding businessmen will have to support (pay) many contenders. At stake are not just the country's resources, but its entire policy framework as well. In this respect, Indonesia represents the worst of the Chinese and Indian experience in terms of corruption.

http://www.atimes.com

From AWSJ

Born Bad ;August 18, 2006

Corruption, it is widely agreed, is a global disease. But what causes it: The absence of rule of law, or cultural predisposition? A pair of social scientists found a Petri dish in which to find out, a place that throws together people from the world over and tempts them to break laws -- with zero legal enforcement. That's right; we're talking
about the United Nations.

Ray Fishman and Edward Miguel studied U.N. diplomats' parking habits from 1997 until 2002, a period when rule-breakers still enjoyed diplomatic immunity. (Countries now get dinged foreign-aid money for each unpaid fine.) Foreign dignitaries racked up more than 150,000 unpaid parking tickets, amounting to an outstanding bill of more than $18 million.

The study posited that a cavalier approach to parking rules reflected respect for the law in general, and national attitudes about official corruption -- since we are talking about officials here. The result, they say: Diplomats from countries with low levels of corruption tended to obey the parking laws, even when they had no chance of being punished. Sweden and Norway, among the least corrupt on Transparency International's 2005 Corruption Perceptions Index, or CPI, had perfect records. Kuwait, Chad and Bulgaria were among the 10-worst offenders; Kuwait clocked an impressive average of 246 violations per diplomat per year. These countries rank much lower on the CPI. Chad, the third-worst parking offender, is tied with Bangladesh for CPI's most
corrupt.

The answer then to this chicken-egg question seems to be that culture does condition certain behavior. The stereotypes fit. But, wait, not always. The Central African Republic had no unpaid parking fines, yet isn't renowned for clean government. Other countries -- Bahrain, Malaysia, Oman, and Turkey -- break the rules but then always pay the fine. Perhaps they are culturally predisposed to take responsibility for their actions. Or maybe just to buy their way out of trouble. (The unasked question is why these diplomats are always trying to park, when driving is one of the slowest ways to get around Manhattan.)

The study also found that diplomats kept the attitudes they brought with them, even in new surroundings. Instead of converging toward the American attitudinal middle -- Canadians becoming bigger scofflaws, for example, and Colombians more righteous -- parking behavior persisted over time. "Corruption norms are sticky," the authors
conclude.

So we're doomed to behave like our countrymen. Except that the authors haven't finished exploring, as they put it, "how cultural and social backgrounds lead to long-run differences in beliefs, tastes, values, and economic decisions." Next up is a study of the multinational taxi drivers at New York's John F. Kennedy airport. Come to think of it,
all this confirms another stereotype: There's nothing social scientists won't study these days.

http://online.wsj.com

For a better understanding, read on

The Varieties of Corruption By: Sam Vaknin, Ph.D.

AVAILABLE FROM http://samvak.tripod.com/nm089.html

To do the fashionable thing and to hold the moral high ground is rare. Yet, denouncing corruption and fighting it satisfies both conditions. Yet, corruption is not a monolithic practice. Nor are its outcomes universally deplorable or damaging. One would do best to adopt a utilitarian approach to it. The advent of moral relativism has taught us that "right" and "wrong" are flexible, context dependent and culture-sensitive yardsticks. What amounts to venality in one culture is considered no more than gregariousness or hospitality in another.

Moreover, corruption is often "imported" by multinationals, foreign investors, and expats. It is introduced by them to all levels of governments, often in order to expedite matters or secure a beneficial outcome. To eradicate corruption, one must tackle both giver and taker.

Thus, we are better off asking "cui bono" than "is it the right thing to do". Phenomenologically, "corruption" is a common - and misleading - label for a group of behaviours. One of the following criteria must apply:

1. The withholding of a service, information, or goods that, by law, and by right, should have been provided or divulged.

2. The provision of a service, information, or goods that, by law, and by right, should not have been provided or divulged.

3. That the withholding or the provision of said service, information, or goods are in the power of the withholder or the provider to withhold or to provide AND That the withholding or the provision of said service, information, or goods constitute an integral and substantial part of the authority or the function of the withholder or the provider.

4. That the service, information, or goods that are provided or divulged are provided or divulged against a benefit or the promise of a benefit from the recipient and as a result of the receipt of this specific benefit or the promise to receive such benefit.

5. That the service, information, or goods that are withheld are withheld because no benefit was provided or promised by the recipient.

Even then, we should distinguish a few types of corrupt and venal behaviours in accordance with their OUTCOMES (utilities):

(1) Income Supplement

Corrupt actions whose sole outcome is the supplementing of the income of the provider without affecting the "real world" in any manner. Though the perception of corruption itself is a negative outcome - it is so only when corruption does not constitute an acceptable and normative part of the playing field. When corruption becomes institutionalized - it also becomes predictable and is easily and seamlessly incorporated into decision making processes of all economic players and moral agents. They develop "by-passes" and "techniques" which allow them to restore an efficient market equilibrium. In a way, all-pervasive corruption is transparent and, thus, a form of taxation.

(2) Acceleration Fees

Corrupt practices whose sole outcome is to ACCELERATE decision making, the provision of goods and services or the divulging of information. None of the outcomes or the utility functions are altered. Only the speed of the economic dynamics is altered. This kind of corruption is actually economically BENEFICIAL. It is a limited transfer of wealth (or tax) which increases efficiency. This is not to say that bureaucracies and venal officialdoms, over-regulation and intrusive political involvement in the workings of the marketplace are good (efficient) things. They are not. But if the choice is between a slow, obstructive and passive-aggressive civil service and a more forthcoming and accommodating one (the result of bribery) - the latter is preferable.

(3) Decision Altering Fees

This is where the line is crossed from the point of view of aggregate utility. When bribes and promises of bribes actually alter outcomes in the real world - a less than optimal allocation of resources and distribution of means of production is obtained. The result is a fall in the general level of production. The many is hurt by the few. The economy is skewed and economic outcomes are distorted. This kind of corruption should be uprooted on utilitarian grounds as well as on moral ones.

(4) Subversive Outcomes

Some corrupt collusions lead to the subversion of the flow of information within a society or an economic unit. Wrong information often leads to disastrous outcomes. Consider a medical doctor or an civil engineer who bribed their way into obtaining a professional diploma. Human lives are at stake. The wrong information, in this case is the professional validity of the diplomas granted and the scholarship (knowledge) that such certificates stand for. But the outcomes are lost lives. This kind of corruption, of course, is by far the most damaging.

(5) Reallocation Fees

Benefits paid (mainly to politicians and political decision makers) in order to affect the allocation of economic resources and material wealth or the rights thereto. Concessions, licences, permits, assets privatized, tenders awarded are all subject to reallocation fees. Here the damage is materially enormous (and visible) but, because it is widespread, it is "diluted" in individual terms. Still, it is often irreversible (like when a sold asset is purposefully under-valued) and pernicious. a factory sold to avaricious and criminally minded managers is likely to collapse and leave its workers unemployed.

Corruption pervades daily life even in the prim and often hectoring countries of the West. It is a win-win game (as far as Game Theory goes) - hence its attraction. We are all corrupt to varying degrees. It is the kind of corruption whose evil outcomes outweigh its benefits that should be fought. This fine (and blurred) distinction is too often lost on decision makers and law enforcement agencies.

ERADICATING CORRUPTION

An effective program to eradicate corruption must include the following elements:

a. Egregiously corrupt, high-profile, public figures, multinationals, and institutions (domestic and foreign) must be singled out for harsh (legal) treatment and thus demonstrate that no one is above the law and that crime does not pay.

b. All international aid, credits, and investments must be conditioned upon a clear, performance-based, plan to reduce corruption levels and intensity. Such a plan should be monitored and revised as needed. Corruption retards development and produces instability by undermining the credentials of democracy, state institutions, and the political class. Reduced corruption is, therefore, a major target of economic and institutional developmental.

c. Corruption cannot be reduced only by punitive measures. A system of incentives to avoid corruption must be established. Such incentives should include a higher pay, the fostering of civic pride, educational campaigns, "good behaviour" bonuses, alternative income and pension plans, and so on.

d. Opportunities to be corrupt should be minimized by liberalizing and deregulating the economy. Red tape should be minimized, licensing abolished, international trade freed, capital controls eliminated, competition introduced, monopolies broken, transparent public tendering be made mandatory, freedom of information enshrined, the media should be directly supported by the international community, and so on. Deregulation should be a developmental target integral to every program of international aid, investment, or credit provision.

e. Corruption is a symptom of systemic institutional failure. Corruption guarantees efficiency and favorable outcomes. The strengthening of institutions is of critical importance. The police, the customs, the courts, the government, its agencies, the tax authorities, the state owned media - all must be subjected to a massive overhaul. Such a process may require foreign management and supervision for a limited period of time. It most probably would entail the replacement of most of the current - irredeemably corrupt - personnel. It would need to be open to public scrutiny.

f. Corruption is a symptom of an all-pervasive sense of helplessness. The citizen (or investor, or firm) feels dwarfed by the overwhelming and capricious powers of the state. It is through corruption and venality that the balance is restored. To minimize this imbalance, potential participants in corrupt dealings must be made to feel that they are real and effective stakeholders in their societies. A process of public debate coupled with transparency and the establishment of just distributive mechanisms will go a long way towards rendering corruption obsolete.

Note - The Psychology of Corruption

Most politicians bend the laws of the land and steal money or solicit bribes because they need the funds to support networks of patronage. Others do it in order to reward their nearest and dearest or to maintain a lavish lifestyle when their political lives are over.

But these mundane reasons fail to explain why some officeholders go on a rampage and binge on endless quantities of lucre. All rationales crumble in the face of a Mobutu Sese Seko or a Saddam Hussein or a Ferdinand Marcos who absconded with billions of US dollars from the coffers of Zaire, Iraq, and the Philippines, respectively.

These inconceivable dollops of hard cash and valuables often remain stashed and untouched, moldering in bank accounts and safes in Western banks. They serve no purpose, either political or economic. But they do fulfill a psychological need. These hoards are not the megalomaniacal equivalents of savings accounts. Rather they are of the nature of compulsive collections.

Erstwhile president of Sierra Leone, Momoh, amassed hundreds of video players and other consumer goods in vast rooms in his mansion. As electricity supply was intermittent at best, his was a curious choice. He used to sit among these relics of his cupidity, fondling and counting them insatiably.

While Momoh relished things with shiny buttons, people like Sese Seko, Hussein, and Marcos drooled over money. The ever-heightening mountains of greenbacks in their vaults soothed them, filled them with confidence, regulated their sense of self-worth, and served as a love substitute. The balances in their bulging bank accounts were of no practical import or intent. They merely catered to their psychopathology.

These politicos were not only crooks but also kleptomaniacs. They could no more stop thieving than Hitler could stop murdering. Venality was an integral part of their psychological makeup.

Kleptomania is about acting out. It is a compensatory act. Politics is a drab, uninspiring, unintelligent, and, often humiliating business. It is also risky and rather arbitrary. It involves enormous stress and unceasing conflict. Politicians with mental health disorders (for instance, narcissists or psychopaths) react by decompensation. They rob the state and coerce businessmen to grease their palms because it makes them feel better, it helps them to repress their mounting fears and frustrations, and to restore their psychodynamic equilibrium. These politicians and bureaucrats "let off steam" by looting.

Kleptomaniacs fail to resist or control the impulse to steal, even if they have no use for the booty. According to the Diagnostic and Statistical Manual IV-TR (2000), the bible of psychiatry, kleptomaniacs feel "pleasure, gratification, or relief when committing the theft." The good book proceeds to say that " ... (T)he individual may hoard the stolen objects ...".

As most kleptomaniac politicians are also psychopaths, they rarely feel remorse or fear the consequences of their misdeeds. But this only makes them more culpable and dangerous.

GoTo TOP (Main Page)