Reducing public sector corruption

Public corruption is about the misuse of public power, position, privilege or property usually for private purposes. It results in the diversion of public resources, and the undermining of trust in public institutions. Although it is not the only form of corrupt conduct within the definition, breach of public trust lies at its core.  Mere mistakes, incorrect decisions, and even negligent maladministration, are not in themselves corrupt conduct. Generally, there must be an element of dishonesty and/or personal benefit.

While all societies have corrupt features, the particular circumstances of developing countries (rapid social and economic change, strong kinship ties, new institutions, overlapping and sometimes conflicting views about proper public behaviour) may be peculiarly conducive to corruption.

Corruption takes place in transactions between private individuals or firms and public officials; thus, it is the misuse of public funds and the failure of public trust that is of particular concern. Corruption seriously undermines the effectiveness of government. Over time corruption tends to corrode popular confidence in public institutions. This makes it harder to raise the standards of public service, deflects public debate away from economic performance toward this single issue' and in extreme cases prompts (or at least provides a justification for) violent changes in government.

"Rent-seeking" can become an obsessive preoccupation. Public officials will do nothing without bribes, and many people are unproductively employed in securing their favours or buying their silence. Corruption can thus become an institution's raison d'etre, rather than a minor aspect of its activities. In extreme cases, such as in countries which are major exporters of illegal drugs, administration in entire regions and arms of government may become perverted by corruption. It tends to favor those with economic or institutional power.

Some corruption is on such a scale that it has major economic consequences: it may stimulate the illegal export of capital or result in large projects being awarded to contractors (often multinational companies) according to the size of their bribes rather than the quality of their performance.

The eradication of corruption as a feature of public life depends on the gradual creation of a political and public climate favouring impartial institutions, as well as on specific actions by government. Many governments from time to time have initiated anti-corruption drives. However, such efforts tend to be shortlived and ineffective, since they often concentrate on punitive measures and even tighter, but still unworkable, controls, instead of designing interventions so as to minimize the opportunities or incentives for corruption. For example, corruption can be limited by avoiding administratively created scarcities (as some centrally planned economies have done by effectively sanctioning a "second economy"); by reducing controls on international trade and payments; and by improving the incentives and accountability of officials in the areas where regulations or administrative discretion remain. Corruption is usually better fought by a combination of fewer, better-paid officials controlling only what really needs to be (and can effectively be) controlled in the full light of public scrutiny' than by occasional anti-corruption "campaigns".