The Scourge of Corruption

The late Indian Prime Minister Rajiv Gandhi famously complained that only 15 cents of every dollar spent by the government reached the poor. This was stated sometime in the 1990s and in a proverbial sense holds true to this day. The post-colonial South Asian states have displayed great propensity to nurture and maintain huge bureaucracies, which alas are not accountable. Whilst in India the politicians have managed to subordinate the public servants to their agendas and whims, in other countries the bureaucracy as a colonial relic retains autonomous powers. In Pakistan, the bureaucratic complex may not retain the traditional dominance but it has managed to evade accountability mechanisms – internal and external – thereby making the task of responsive governance and achieving transparency rather difficult.

Little wonder that public sector spending in the region has resulted in suboptimal results. The rampant corruption in the public sector in South Asian countries and the absence of effective monitoring systems has fed into the syndrome which Bill Easterly defined in the context of Pakistan: ‘growth without development.’ Corruption also acts as a major barrier to growth by providing strong disincentives to potential investors. The state is the major provider of basic public services such as drinking water, power, health and education. Corruption therefore tends to have a more visible and tangible impact on the lives of ordinary people especially the disadvantaged poor in the region.

The Corruption Perception Index (CPI) devised by Transparency International (TI) is a rough measure of how citizens, businesses and others view the issue of corruption. Table 1 compares the CPI of the main countries in the region from 2006 to 2010.

A comparison of the corruption perception index of the region from 2006 till 2010 reveals a pessimistic picture. Corruption levels have not changed substantially over the years and the level of corruption has stayed stationary. Another way of viewing corruption in the international context is to see how the regional countries fare. Table 2 outlines country rankings.

A closer look at the country rankings from 2006 to 2010 shows many variations. India, Pakistan, Sri Lanka and Nepal demonstrate decline in their rank while perceptions on Bangladesh and Bhutan have undergone marked improvement. Pakistan’s CPI rank from a high of 134 in 2008 to 143 in 2010 suggests a relative increase in corruption during the recent years. The CPI ranks of India and Sri Lanka have only modestly declined since 2006. Bangladesh on the other hand has registered a relative improvement in its corruption record, from CPI rank of 162 in 2007 to a rank of 134 in 2010. TI surveys have also been criticized for their reliance on ‘perceptions’ as opposed to serious research and hard data. Nevertheless, they give some crude overview; and are useful for comparative purposes.

TI surveys provide some useful insights on corruption by sectors. In 2002, TI published a report on the South Asian region wherein several corruption trends were common to the region. In four out of the five countries surveyed, the police was perceived as the most corrupt sector in the countries. In Nepal, where the land administration topped the list of the most corrupt sector, the police was perceived as the third most corrupt sector in the country.  Respondents in Bangladesh, India and Sri Lanka listed Health as the second most corrupt sector. The power sector was listed as the second most corrupt sector in Pakistan and the third most corrupt in India.  While the survey is old, the trends by and large remain the same given the results of recent studies and media reports.

Citizens suffer from the harmful effects of corruption on a daily basis. Security and such other entitlements are either denied or become inaccessible due to the rent seeking behavior of the states. In all the South Asian countries, the media and superior courts have emerged as major means of external accountability of the executive excesses and corrupt practices. The experience of central bodies to tackle corruption at the highest levels has been mixed. Whilst the Indian Central Bureau of Investigation (CBI) has shown some results, the central bodies in Pakistan and Bangladesh in recent years were viewed as instruments of witch hunting and ‘fixing’ political opponents. This is a major lesson for adopting the easy route of having a high profile anticorruption body and not focusing on a systems approach.

South Asian states are inheritors of a colonial administration organized to extract revenues and maintain public order. Being citizen-oriented was not the core mandate of the state. After Independence, the colonial institutions have survived and have not been restructured in a major way. Decentralization of authority and instituting local accountability mechanisms therefore is the way forward. Sadly, local governments in Pakistan and Bangladesh are not strong and largely managed by centrally appointed bureaucrats. The Indian model of local democracy is a more robust one though it has its own sets of issue including varying local resources and interface with powerful administrators and magistrates. Nepal is undergoing a structural transformation and the shape of governance architecture is yet to emerge though a great beginning has been made by introduction of a local government system.

Given the mistrust of people in public institutions, it is also imperative that internal accountability mechanisms be improved across the public sector. Internal audits, monitoring of results and tracking of expenditures can improve the way state works. Participatory budgeting is another tool successfully employed in Latin America and parts of Asia where citizen monitoring and feedback during budget preparation allows for better utilization of scarce resources; and fulfillment of priorities identified by the citizens and taxpayers.

The recent middle class movement in India against corruption indicates the widespread impatience with corruption. This is a critical moment in South Asian history. Its key countries are all being governed under democratic rule, have vibrant civil societies; and powerful media oversight. Bhutan, traditionally a monarchy, is moving towards a democracy as well. Corruption is inextricably linked to public sector reform. This may be the right time to reform the way state works and reduce opportunities for rent seeking and instances of malfeasance. South Asia cannot achieve peace and stability without tackling poverty, providing economic opportunities and ensuring transparent governance. All of these reforms will go a long way in reducing corruption in the region.  

Raza Rumi is a writer, policy adviser based in Lahore. He is on the editorial board of The Friday Times, and also maintains a national development blog at www.razarumi.com. Email: razarumi@gmail.com

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