Report No. 179

(c) Causes of corruption

There are many causes of corruption at both institutional and individual levels. Experts of different specialities have highlighted various factors, e.g., decline in religious beliefs or in public morality, uncertainty in the standards of appropriate behaviour, divergence between the formal and informal rules governing behaviours in the public sector, value conflicts in the post colonial settings where the standards and practices embedded within traditional relationship differ from the institutions left behind by the departing colonial power.

Robert Klitgaard, a political scientist, has conceptualized the opportunity for corruption within an institution in the following formula-

Corruption = (Monopoly) + (Discretion.- Accountability

According to hi.-

"The opportunity for corruption is a function of the size of the rents under a public official's control (M), the discretion that official has in allocating those rents (D), and the accountability that these official faces for his or her decisions.1

1. Robert Klitgaard, Controlling Corruption Berkeley; University of California Prss, 1988, page 75.

The empirical research done by Daniel Kaufmann and Jeffrey Sachs suggests that there is a complex set of the determinants of corruption, e.g., poor institutions (including the rule of law and safeguards for the rights of property), civil liberties, governance (including the level of professionalization of the administrative service) and economic policies as also characteristics like the size of the country which seem to play an enabling role for corruption. 1 Along these lines, the World Bank points out both institutional and economic policy factors which generate a nourishing environment for corruption. In its report of 1997, it states that corruption thrives :

1. See Asia Foundation Working Paper series on Corruption prepared by Amanda L. Morgan, Consultant Asia Foundation page 50.

"Where distortions in the policy and regulatory regime provide scope for it and where institutions of restraint are weak. The problem of corruption lies at the intersection of the public and the private sectors. It is a two-way street. Private interests, domestic and external, wield their influence through illegal means to take advantage of opportunities for corruption and rent seeking, and public institutions succumb to these and other sources of corruption in the absence of credible restraint."

Thus opportunities for corrupt behaviour develo.-

(i) whenever public functionaries have large discretion in exercising the powers and little accountability for their actions taken therefor;

(ii) whenever government policies leave some gap, then these gaps create opportunities for middlemen or the actors of corruption;

(iii) such opportunities also develop because of prevalence of administrative secrecy which encourages corruption and lobbying and insularity from democratic control.

Hence such root causes of corruption and also other causes which give rise to corruption have to be properly understood.