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The politics of corruption

While a strong anti-corruption law can reduce petty corruption, at the heart of the problem is the increasing lack of accountability in the political system, big corporations, media and even NGOs, writes John Samuel. Breaking the nexus between business elites and political parties could be the first step

The practice and process of corruption is deeply political. Corruption is primarily the abuse or misuse of power in society or institutions for personal aggrandisement or vested interests. The abuse of power can be at the local or global level. The word ‘corrupt’ is derived from the Latin root corruptus, past participle of corrumpere – which means to abuse or destroy, and when used as an adjective it denotes utterly broken.

The subversion, misuse and abuse of power has systemic and socio-historical manifestations in different contexts. This has to do with the way power is institutionalised and internalised in a given society with a particular cultural and political history. For example, the political elite of South Asia often demonstrate feudalism and cumulative hierarchies (internalised through the caste system). So the one defining political feature of South Asia is that the power-elites in most countries (India, Pakistan, Bangladesh, Sri Lanka, Bhutan and Afghanistan) use family and caste/identity networks to acquire and maintain power. Such an internalised ‘order of power’ tends to undermine the process and content of the democratic process.  Though political parties play a cardinal role in the democratic process of a country, the irony is that political parties themselves have the least internal democracy or accountability.  In many cases, political parties are reduced to ‘interest’ networks to capture and control the power of the state.  In many countries in Africa also, the use and abuse of power can be linked to ‘tribal’ hierarchies and identities. 

So it is important to understand the causes and consequences of ‘corruption’ in the context of the history of the institutionalisation and internalisation power, the nature and character of the power elites and the social and economic inequalities within a given society.  The political economy of corruption is primarily about the nexus between the economic, social and political elites in a given society that allows them to subvert, misuse, abuse or misappropriate institutions, policies and systems for vested interests or private gain. The unholy nexus between business elites, political elites and media elites in managing the economic, political and natural resources of a country is a global trend, affecting the richest and the poorest country. Various studies indicate that the quantum of bribes alone is estimated at over US $ 1 trillion annually.

The ongoing economic crisis has exposed the integral role of corporate elites and missionaries of finance capitalism in shaping policy and political agendas even in the so-called democracies of the world.  When the cyclone hit Wall Street in 2008, it exposed the nexus between the capital fund managers of Wall Street and the mandarins in the corridors of political power: the entrenched ‘partnership’ between the rich and those who are ‘democratically’ elected to ‘run’ the government.  Such a nexus between the economic and political elites of a country is at the root of entrenched political and institutional corruption in many countries. A state of unbridled political and economic corruption is known as a ‘kleptocracy’, literally meaning ‘rule by thieves’. The cumulative impact of corrupt practices is the erosion of the legitimacy of the state.  The spontaneous mobilisation of ordinary people across the world, from New York to New Delhi, from London to Lisbon, from Rome to Rio and to Egypt, Yemen and Syria, has one thing in common: all of them questioned the legitimacy of their governments and in many cases the character of the state, and all of them demanded accountability from leaders, the state as well as the market.

Though corruption does have moral, theological and philosophical connotations, it is important to analyse and address corruption in relation to political systems, dominant economic power relations and the culture of internalised power. The manifestations and forms of corruption may include bribery, extortion, cronyism, nepotism, patronage, graft and embezzlement. While corruption may facilitate criminal enterprises such as drug trafficking, money laundering, and human trafficking, it is not restricted to these activities. The legality and illegality of a particular act of corruption or abuse of power may differ depending on the ‘jurisdiction’ of a country. In some countries, certain political funding practices are legal, but may be illegal in another country. In many countries, government officials have broad or poorly defined powers, which make it difficult to distinguish between legal and illegal actions.

While the cause of corruption has to do with the misuse and abuse of political and systemic power, the consequences of corruption are many. Corruption undermines the effectiveness, legitimacy and accountability of institutions and governments. Corruption siphons off money meant for social and economic development of a country. Corruption thrives on entrenched socio-economic inequality and further increases the gap between the rich and poor, the powerful and the marginalised. In the political arena, corruption undermines democracy and governance by flouting or even subverting formal processes. Corruption in elections and in legislative bodies undermines accountability and distorts the representation in policymaking; corruption in the judiciary undermines the rule of law; and corruption in administration results in the inefficient provision of services. Corruption violates the centrality of civic virtue.  The net result is that corruption undermines the value of democratic governance and erodes the institutional legitimacy and capacity of governments to deliver services, ensure the security of citizens and deliver socio-economic development.

In the last 20 years, anti-corruption initiatives have become a part of governance and development discourse across the world. With the paradigm shift in information and communication technologies, it has become impossible to keep corrupt practices under the veil of secrecy and silence, either in the form of a controlled state media or suppressed voices of dissent. The neo-liberal economic paradigm of free market capitalism and economic globalisation has unleashed a new power matrix in many countries, particularly those with big markets (like India, China) or those with sizeable natural resources (Nigeria, Sudan).  Such a corrupt nexus has a dimension of geopolitics as well as a political economy of aid, trade and debt.  It is not an accident of history that most of the conflicts in Africa or Asia are fought with small weapons illegally exported by big companies in Europe.  It is also not an accident that most entrenched conflicts occur in countries with rich natural resources.

Neither is it an accident of history that the companies and banks that benefit most from the illicit flow of finance happen to be in some of the richest countries. Illicit financial flows indicate the transfer of money earned through illegal activities such as corruption, transactions involving contraband goods, criminal activities, and efforts to shelter wealth from a country’s tax authorities. It is estimated that more than US$ 1 trillion is transferred from poor countries to rich ones in the form of illicit flow of funds. The illicit flow of finance from African countries is estimated to be around US$ 25 billion per year. It is also pointed out that for every dollar received as economic assistance or aid, around 10 dollars are transferred from poor countries to rich ones in the form of illicit financial flows. It is an irony of our times that the very countries that host the big companies and banks that benefit from the illicit flow of finance also preach to the ‘third world’ about the need to ‘fight’ corruption. So corruption has its local, national and international ramifications. 

Seeing corruption as petty bribery without challenging the corrupt system at the heart of the political economy nationally and internationally would be equivalent to consuming only aspirin to fight heart disease. However, the globalisation of information and technology has also helped expose corruption in unprecedented ways. Social networks and new media can expose the corrupt practices swept under the carpet by media and market elites in connivance with political elites.

It is in recognition of widespread corruption across the world that the United Nations Convention Against Corruption (UNCAC) was adopted on October 31, 2003. UNCAC is the first legally binding international anti-corruption instrument. In its 8 Chapters and 71 Articles the UNCAC obliges its state parties to implement a wide and detailed range of anti-corruption measures affecting their laws, institutions and practices. These measures aim to promote the prevention of criminalisation, law enforcement, international cooperation, asset recovery, technical assistance and information exchange. The UNCAC is ratified or approved by 154 countries and the European Union. Despite this, the biggest challenge is the lack of implementation of the principles and provisions of UNCAS in the national context because effective laws or independent anti-corruption commissions to make them work are absent.

In the context of the political economy of aid and governance, there has been an effort to export a successful model of anti-corruption from the western liberal democratic context to other countries in Asia and Africa. However, such measures did not work because the context of the internalisation, institutionalisation and culture of power is very different from the European context. In a recent book Making the State Responsive (UNDP, 2011, Goran Hyden and John Samuel) we have made the following observation:

“Institutional innovations have typically come from external sources in the form of transfers from societies in which these institutions have evolved over a long time. The ombudsman institution found in Nordic countries is one of these exports. It has been adopted quite successfully in countries that already have a tradition of rule of law, and where independent scrutiny of those in power is taken for granted. It has been much less successful in countries where particularistic values still prevail and the notion of universal norms is only weakly institutionalised. Transfers to these countries have typically ended as half-measures, for example when the ombudsman institution reports to the presidency rather than parliament, rendering checks on the executive ineffective. The establishment of these institutions may not have been wholly unsuccessful, as the possibility exists in the future that groups of citizens will demand their independence and accountability from the legislature rather than the executive, but it is questionable whether these half-measures qualify as ‘good enough’ governance. There is evidence from a number of countries – Brazil, India, Mongolia, and South Africa – that institutional innovations spring from hardship. Learning how to achieve something comes with the urge to change the status quo. Claiming the state, therefore, is very much a matter of challenging public institutions, whether national or sub-national, from below or within, to ensure adherence to norms and principles of equity in service delivery. Institutional innovations that help citizens to better monitor and measure government performance are important, but there are no shortcuts. Evolving such institutions, as the case study on India convincingly shows, is associated with political battles. Not all are won.”

While a strong anti-corruption law can, to an extent, control or reduce petty corruption or instances of bribery and speed/protection money at the lower levels of bureaucracy (particularly police, land registration, public works departments), the real cancer of corruption operates at the heart of the political system in India and elsewhere.

In the South Asian context, one of the major systemic causes of corruption is the subversion of the political party system and electoral process.  In the post-independence era, the legitimacy of the political party system and that of the state was relatively higher. Hence, it was relatively easier to collect individual contributions from ordinary members of the party or general public. However, in the last 30 years, the political party system itself has become corporatised, often controlled by the family or caste/identity network. With the cadre of political parties weakening, the visibility and outreach mechanism of political parties was outsourced through costly advertising campaigns, media management and  image management by professional public relations companies.  When the cadre dwindled at the ground level, institutional structures of political parties took precedence over mass politics.  ‘Mass’ came to denote only the numbers at rallies organised by local leaders with money and muscle power. This degeneration of the political party system coincided with the increasing corporate control of political parties.

When it became difficult to raise financial resources from their cadres, new party fund-managers built a nexus with the new corporate elites in the neo-liberal era. The corporate elites of multinational corporations and big Indian companies scrambling for ‘market share’ also knew the importance of establishing a ‘political share’ by ‘investing’ in various political parties and leaders.  A percentage of the corporate budget classified as ‘miscellaneous’ or ‘charity’ found its way into party coffers or worse, the pockets of individual leaders. The political class has in turn provided tax rebates and policies that promote one or other companies or help them acquire land and resources. The new economic elites ‘invested’ in political parties, political leaders, elections as well as media. The Niira Radia tapes dramatically exposed the unholy nexus at the heart of the political and policy process in the largest democracy in the world.  

The media-market nexus subverting the electoral process has been completed by the ‘outsourced’ poll -- using the methods of market survey to determine the ‘mood’ of the country or ‘legitimacy’ of its leaders. As a result media has become midwife to the strengthening of the nexus of the political, policy and corporate elites.  In the absence of real mass politics and the erosion of cadre party politics, political leaders resort to new tactics like Rath Yatras to grab the attention of the media and masses. The very term ‘ratham’ or ‘chariot’ denotes the ‘power’ of the king. When political leaders begin to think and act like kings they can at best be benevolent patrons and at worst corrupt pimps in the corridors of power.

The health of political parties and the electoral process is the most important marker of a healthy democracy. Hence it is crucial to maintain the health of these two necessary constituents of the democratic process. The cancer of corruption is actually eating into the heart of the democratic political system. And the erosion of the legitimacy of such a system can be detrimental to the very viability and sustainability of democracy. This was evident in the context of Bangladesh, when the army stepped in with an ‘appointed’ civil government to ‘fight corruption’ at the cost of democracy.

Political parties and electoral systems need to be more transparent and accountable. The decoupling of the interests of business elites and political parties is imperative to sustain democracy in India and elsewhere.  Funding for political parties and elections needs to be transparent and accountable. At the heart of the problem is the increasing lack of accountability in the political system, media, big corporations and even NGOs.  The right to accountability should be an integral part of the right to democratic governance.

(These are the personal views of the author and do not reflect the views or positions of any of the organisations with which he is associated)

Infochange News & Features, October 2011