Summary: 1.Introduction, 2. Defining Corruption,3. Causes ,4. Public Choice Perspective, 5. One party Systems & Corruption, 6. Statism & Corruption, 7. The Economic Impact of Corruption , 8.Traditional means of fighting corruption, 9.New ways of fighting corruption-Institutions & Public Choice Approach, 10. Self-Enforcing Constitution, 11.Challenges to Constitutionalism in Africa,
12. Summary and Conclusion
Corruption is the use of public resources for private gain.
Corruption can be measured by corruption Index(CPI), which ranks countries based on how investors, political and risk analysts, and the public perceive levels of corruption.
The Index ranges from zero (high corruption), to 10 ( highly clean-minimum corruption)
The CPI is based on 1999 data is shown in table 14.1
Based on CPI data, Denmark (CPI=10)and Finland (9.8) are the least corrupt or top two cleanest states. Nigeria (CPI=1.6) & Cameroon (CPI=1.5) are the most corrupt states.
Of the 10 most corrupt economies 4 are in Africa (Cameroon, Nigeria, Tanzania, Kenya)
Others- such as Botswana, Mauritius, Namibia, and South Africa are have relatively less corruption & making progress
Corruption Debates- Two Views
View 1- It may encourage inefficiency and discourage wealth creation and growth..
View 2: It may “grease” wheels of bureaucracy, and make government more responsive to the needs of investors and society.
1.But, studies show corruption has negative effects on economic development by contributing to less effective governance and retarding wealth creation, reversing democratic gains made since the end of the cold war, making economies less able to sustain viable and effective economic systems.
2. Cost of public service is high to provide more income to civil servants- contributes to high transaction costs
3. Increases the burden of the public sector on citizens. 4. It demoralizes, and leads to political opportunism such as ‘rent seeking” that contribute to inefficiency.
5. Leads to inability of a government to sustain professionals and administrators,
6. Encourages the underutilization of skilled and educated labor cost or the ‘brain drain’..,
7. Distorts international trade and investment,
8. discourages investment and leads to capital flight,
9. May stunt innovation and introduction of new technologies.
Examining the incentives and rules that regulate socio-political interaction of society and change those incentives if they are flawed.
Promote good governance that is accountable, transparent, honest, participatory, guarantees economic freedom, rights of individuals to freely exchange and contract, based on well secured property rights by law.
Move forward with constitutional reforms with constitutional limits on government officials to prevent abuse of power, guarantee economic freedoms, and to controls negative incentives. A clear delineation of political/public activities from private economic activities is necessary.
2. Defining & Explaining Corruption
1. Two elements: Poor Performance of a public duty and deviations from the rules that regulate civil servants. A public servant can be corrupt if the his performance sacrifices the principal (citizens) for his own benefit.
Corruption in Africa is understood in practical terms such as: theft of public resources by civil servants, embezzlement, illegal extraction of public resources, nepotism, favoritism, bribery, etc…
2. Defining & Explaining Corruption cont.
Corruption is an extra-legal institution used by individuals or groups to influence the bureaucracy for self-serving reasons.
In Nigeria and Cameroon, minority ethnic groups are denied for effective participation in governance. Anglophones are excluded from economic and political participation in Cameroon.
In Nigeria, ethnic minorities in the Delta Region are battling the federal government over natural resources and oil. Nigeria, state institutions are used by individuals and groups as tools of plundering local wealth. Rebels have began to kidnap oil company executives. Nigeria is the 5th oil exporter to the USA
2 Defining & Explaining Corruption cont.
The Second Determinant of Corruption is inefficiency & incompetence of the civil service.
Citizens and businesses have no effective way of monitoring opportunistic way civil servants.
In Zaire, 1979, the World Bank determined about 92% of state employees were not able to meet their subsistence needs with their legal salaries. So, they have to take bribes.
Income inequality is another factor. Some teachers and professors are not paid on time in Nigeria, Cameroon and few other countries. So, they are compelled to engage in corruption
3. Causes of Corruption
1. Most Corrupt State- Example-Nigeria is a leader where institutions are used by individuals as tools of plundering citizens.
2. Incompetence and inefficiency of civil service.
3. Poverty and severe inequality in income.
4. Cultural Norms….
2. Defining and Explaining Corruption cont.- Cultural Factors
Existence of flawed Cultural Norms is another factor.
Corruption may be the cost that countries pay to modernize?.
Loyalty to a group or tribe is more important than individual rights or accountability.
A successful civil servant is expected to share the benefits of his office with members of his group, extended family, or tribe.
3. Causes of Corruption in Africa
1. Corrupt governments- Example- Nigeria- where institutions are used by individuals as tools of plunder citizens.
2. Incompetence and inefficiency of civil service.
Corruption is seen as a post-constitutional opportunism aimed at producing benefits for individual or group at the expense of society.
Once the constitution is adapted there is an incentive by individuals and groups to capture the state’s redistributive or transfer power.
The process through which individuals and or groups expend resources to affect distributional outcome is called Rent Seeking
Effective control of corruption must based on institutional reforms including constitutions to constrain the ability of the state to intervene in private transactions.
5. One-Party Political System and Corruption-Centralization of Power
The first generation of African leaders took actions that tried to create a unitary and strong central governments to contain tribalism, by centralizing power and create on party states.
The effect was to create personalistic rule, and other effects such as suffocation of civil society, external debt, economic decay and dependency, military opportunism such as coups, etc..
5. One-Party Political System & Corruption- cont.
Later political competition failed to have a significant impact on corruption since there was no institutional reforms that adequately checks the exercise of a government agency to minimize corruption .
There is a critical need to establish laws and institutions that place constraint on government to avoid opportunistic behavior of bureaucrats.