Corruption is a process rather than an outcome that takes place when public officials including both bureaucrats and politicians violate formal rules of conduct in pursuit of their private benefit, whether for wealth in the form of bribes or for political advantage. Corruption does not take place where public officials are not involved.   It reduces the role of the state to the delivery of a small range of core services that cannot be delivered by the private sector. Corruption undermines citizens’ confidence in democratic institutions and the rule of law; it hurts the economy and deprives states of much-needed tax revenue. Corruption thrives when public accountability is weak. Corruption can occur in terms of cash (bribe), goods and power. Nature of corruption differs with the countries.

The EU has published its first Anti-Corruption Report on 3rd of February 2014. The report says that corruption is costing $185 billion a year across European Union’s 28 countries. According to UN Office of Drugs and crime, every year in the world $1 trillion are paid in bribes while an estimated $2.6 trillion are stolen annually through corruption – a sum equivalent to more than 5 per cent of the global GDP. According to the EU reports there is ‘breath-taking ‘ level of corruption in the region, especially in Greece, Romania and Bulgaria. There are estimations that a corruption cost in the European Union is no less than 120 billion euros each year, and that is the equivalent of an EU annual budget. Report further says corruption is considered rare in Denmark, Finland and Sweden. It named Greece as the worst performer in the EU. Denmark was seen as the least corrupt. Construction companies, which often tender for government contracts, are the most affected.

By undermining the problem Transparency International’s Carl Dolan said “Europe’s problem is not so much with small bribes on the whole,” as Romania and Bulgaria are new member of the union where corruption is rampant. The report was published shortly after Romania’s former prime minister, Adrian Nastase, was sent to jail for four years for taking bribes. The EU has repeatedly raised concerns about a failure to tackle high-level graft in Romania and Bulgaria, the bloc’s two poorest members. In his paper John Hooker (2008) says ‘‘A bribe ‘buys’ a relationship only until the next bribe is required’’ Hooker takes an example of corruption in connection between Enron company and controversial Dabhol power plant in Maharashtra-India when P V Narasimha Rao was Prime minister. Prominent journalist Raghu Dhar was offered a lucrative job by Enron ‘‘to withdraw his opposition’’ and if he would support Enron’s activities. The BJP eventually backed off from the Enron deal when it took power, despite appeals from U.S. Vice President Dick Cheney and Secretary of State Colin Powell to honour the commitment. (BBC News; 17 April 2002). According to Chris Morris BBC News reporter from Brussels ‘‘the report has not been without controversy’’ and ‘‘its release was delayed for months’’, and ‘‘some countries were critical of the European Commission for interfering in areas which they believed were none of its business’’.

For those in a developing country who cannot access health care, education or even food and water without paying bribes, corruption is a daily problem. It is well-known that corruption arrests economic development, and it often remains entrenched because a rich and corrupt elite has a strong self-interest in retaining power.  Its greatest victims are the most vulnerable groups in society – the poor, women and children, the sick and the old. Western cultures are primarily rule-based tend to trust the system. While people from rest of the world trust their friends and family that is relationship-based cultures. Bribery tends to be more prevalent in relationship-based cultures because building a relationship requires time and effort.

Corruption is a social enemy which reduce the role of state. Transparency is the key to overcome corruption. Cutting aid does nothing to eradicate bribery; supporting accountability mechanisms, on the other hand, does work. Some academicians agree that in a situation of transition and transformation, corruption appear in a ground level. If government has ‘will-power’ to bring illegal money into legal investment, also  defined as ‘grease of wheels’ or ‘seed money’, that drive the development. Government, Public and Private sector including business and media can work together to minimise the corruption.

References

http://economics.mit.edu/files/7589

Corruption, Economic Development, and Governance

Corruption, Governance and Economic Development

Anti-Corruption report

Transparency International

Corruption from a Cross-Cultural Perspective

http://link.springer.com/article/10.1007%2Fs11127-005-3988-0

http://www.uq.edu.au/economics/abstract/392.pdf

http://www.asectu.org/userfiles/Gazdar%20Kaouthar.pdf

http://www.asectu.org/userfiles/Gazdar%20Kaouthar.pdf

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