Thursday, February 15, 2007

What is the Syrian government doing about corruption?

When Bashar Assad inherited the presidency in 2000, he declared his intention to purge the government, civil service and public enterprises of corrupt elements. In the language of the following post, he has done no more than fry some big fish. Conveniently, the fish he fried were not so keen on closer relations with Iran. Corruption has been left to eat away at the foundations of Syrian institutions and public morale.

Leadership under Systemic Corruption
Based on an excellent speech by R Klitgaard, Professor of Public Policy at Harvard University

Suppose a new leader wishes to attack systemic corruption in his country. What advice might he need? A distinguishing characteristic of systemic corruption is that the parts of the government that are supposed to prevent corruption have themselves become corrupted—budgeting, auditing, inspection, monitoring, evaluation, and enforcement. This makes the anti-corruption task much more difficult. We cannot simply call for capacity building in these anti-corruption parts of government, because their capacity has been bought off and directed away from their ostensible mission.

The good news is that around the world courageous leaders have made impressive progress against systemic corruption. Each case is different. But some themes emerge that might be helpful for other leaders:

i) Change the Institutional Culture
When corruption is systemic, the institutional culture itself has grown sick. The norm is corruption; expectations are that corruption will continue. Cynicism and despair are widespread. Change seems impossible. And yet there are cases where leaders have made substantial progress in changing the institutional culture. Not completely and not forever, but enough to enable systemic corruption to be reduced. What did the leaders do?

In all cases the leaders begin by sending a strong signal of change to their institutions and to citizens. They publicize their intent to attack corruption. But in corrupt societies, words count for little. People have heard plenty of rhetoric about corruption and now don’t believe it. The culture of corruption contains the idea that big fish will swim free, that the powerful enjoy impunity. Successful leaders change this idea through impressive action, not just words. One step is to fry a big fish (or two).

A second principle used by successful reformers is to change the institutional culture by “picking low-hanging fruit.” These leaders do not necessarily tackle the most important problem first, if that problem is very difficult. Instead, they create short-term successes that are highly visible and change expectations: “Maybe things can change…maybe they will change.” Short-term successes built momentum for long-term reforms. Finally, successful leaders bring in new blood. Even though they work with people within existing institutions, they invite in young people to be “eyes and ears”, business people to take important public positions and investigate cases in depth.

ii) Mobilize and Coordinate
A successful fight against systemic corruption must involve more than one agency of government. For example, success requires the help of the supreme audit authority, the police, the prosecutors, the courts, the finance functions of government, and others. What’s more, the fight against corruption requires the help of the business community and civil society. They can provide unique information about where corruption is occurring and how corrupt systems work. This suggests an apparent paradox. The fight against systemic corruption requires a strong leader—someone strategic and brave and politically astute. But the leadership trait that is most important is the ability to mobilize other actors and to coordinate their efforts productively. The task is not command and control, but mobilization and coordination.

It is important to mobilize the employees of the systemically corrupt institutions. Surprisingly perhaps, many success stories involved people in the government in the diagnosis of government corruption. It turned out that even people involved in corrupt systems were willing and able to analyze where those systems were vulnerable—where there was a combination of monopoly plus discretion minus accountability. Successful reformers also begin with the positive. They to do something good for their public sector employees. For example, new systems of performance measurement are linked with better pay, promotion policies, and “prizes” such as overseas trips and courses.

Those who have successfully fought systemic corruption have involved the people. Many leaders invite business groups and lawyers and accountants to describe how corrupt systems work and to suggest remedial measures. Successful leaders analyze existing corrupt systems in terms of winners and losers. The winners from corruption will resist change. They have to be neutralized. The losers are potential allies. They can be mobilized in the anti-corruption effort.

The potential allies include international aid agencies and multinational corporations, as well as the President (if the reformer is a mayor or a minister or the head of a public enterprise). Successful leaders help these important actors look at the fight against corruption as something good for them—and thereby earn crucial financial and technical assistance.

Reform Systems
In the long term, curing systemic corruption requires better systems. Successful leaders understood that better systems go well beyond better laws and new codes of conduct. They apply the formula

Corruption = Monopoly + Discretion - Transparency

to guide their systemic reforms. Corruption flourishes when someone has monopoly power, has the discretion to decide how much you get or whether you get any at all, and where transparency and accountability are weak. So, to fight corruption we must reduce monopoly, reduce discretion, and increase transparency in many ways.

Reducing monopoly power means enabling competition. Mexico now puts online all government contracts and procurement plans before and after the decisions are made, so prices and winners are public knowledge. Argentina reduced corruption in hospitals by publishing prices of all purchases throughout the hospital system. Corrupt deals that had resulted in higher prices were quickly made evident.

Limiting discretion means clarifying the rules of the game and making them available to the common man and woman, such as manuals which describe simply what is required to get a permit, build a house, start a business, and so forth. Enhancing accountability means many things, and creative leaders use a remarkable variety of methods. One way to improve accountability is to improve the measurement of performance. Leaders can work with their employees and clients to create new systems for measuring the performance of agencies and offices—and then link rewards to results.

Another method is listening and learning from businesses and from citizens. This includes mechanisms for public complaints. Accountability is also increased by inviting outside agencies to audit, monitor, and evaluate. Finally, the press can be an important source of accountability, if they are invited to be partners in reform instead of treated as potential political enemies. Successful reformers recognize that corruption is an economic crime, not a crime of passion. Reformers work hard to change the risk-reward calculations of those who might give bribes and those who might receive them. Raising pay is good, especially for Ministers and other government leaders. Salaries should be somewhat competitive with the private sector—perhaps 80 percent is a good norm. But note that beyond some reasonable minimum that enables leaders to live well, the level of pay does not have much of an effect on corrupt calculations. “Should I take this bribe or not?” The answer depends on the size of the bribe (which is a function of my monopoly power and my discretion), the chance I’ll be caught (a function of accountability), and the penalty I’ll pay if I’m caught. It only depends a little on my level of income, at least once I have enough to live on. Therefore, once salaries for top officials are “reasonable,” leaders should emphasize improving information about performance and the incentives attending good and bad performance.

What about ethics and morality? Successful leaders set a good example. They sometimes create training programs for employees and citizens. Nonetheless, in the success stories I have studied, what might be called “moral initiatives” are not the key feature of the long-term reforms. The keys are systems that provide better incentives for imperfect human beings to perform in the public interest—and to avoid corruption.

Subverting Corruption
There is one final and important point to make. When corruption has become systemic, it resembles organized crime. It has its own parallel system of recruitment and hierarchy, of rewards and punishments, of contracts and enforcement. This parallel system has some inherent weaknesses. For example, in no country of the world are bribery and extortion legal. Therefore, they must be kept (somewhat) secret. The money gained must be hidden. One cannot openly recruit new members. The mechanisms for enforcement are illicit. How can these corrupt systems be subverted? Obviously we cannot count on members of organized crime to clean themselves. Instead, we must analyze the corrupt systems and ask, “How might they be destabilized?” Who is “we”? It can be a new president and his or her team, or a new mayor or head of a public enterprise. But it can also be you and me as members of civil society. Around the world we see new examples of citizen activism, of business groups entering into “integrity pacts,” of intellectuals and journalists and religious leaders going beyond lectures and sermons to analyze corrupt systems and work together to subvert them. For example, a corrupt system of road building in Colombia involved senators, government executives, and key business people. The system involved many “emergency works” that were let on a noncompetitive basis—at a price 30 percent higher than works bid competitively. The surcharge was shared corruptly. This system did not involve all senators, all government officials, or all businesses. The honest ones combined forces. They analyzed the corrupt system. They documented the lifestyles of the corrupt senators and officials. Finally, they publicized the results. The corrupt system could not withstand the light, and soon the key figures were in jail.

A wise leader wishing to fight systemic corruption will mobilize people in the same way. Together, they can analyze corrupt systems and document lifestyles far out of proportion to official pay. And together, they can subvert organized crime and begin a new era of good government.

Ethical Reforms
What about the promotion of ethics in the civil service? As part of a wide-ranging campaign against corruption, the promulgation of a simple and easy-to-understand code of conduct may be a useful step. For example, government officials might sign a declaration that they will not accept bribes, and all firms participating in public-sector procurement might sign one saying that they will not offer bribes.

Experience in many countries, however, shows that efforts to improve public servants’ ethics through codes of conduct and exhortation alone are non-starters. Some of the most scandalous regimes make the loudest noises about public ethics (witness Marcos’s 1975 reforms in the Philippines, or Mobutu’s many moralization campaigns in Zaire). If we could suddenly transform ourselves into more ethical beings, corruption would be reduced, but governments lack ready tools for accomplishing such transformations. Therefore, combating corruption should focus on the reform of systems, combined with great political sensitivity and strategy.


Golaniya said...

I've reposted this on Damascus Spring blog, I hope it's ok with you.

Philip I said...

Sham In Ashrafieh

You are most welcome. The more readers the better.

Anonymous said...

The civil society should have asked from Bashar when he took power for his plans to improve economy, fight corruption and set straight the malfunctioning administration, and should have submitted their vision of the plan. They should have demanded time frame to apply the plan and to measure it’s improvement. I don’t know if they did but this is should be a lesson to all of us of how to hold, big mouths accountable. The Baath party who is famous for yelling, shouting, and shutting up others with their empty poems should be learned the ABC of governing and the rule and duty of the party. This is what is nice about the plan you mentioned, it puts the accountabilities in front of people from all walks of lives. So, in the end the case of Syrian regime and it’s Baath party is the case of loud ethics voices and no real system. Great post, thank you

Restless in Dubai said...

If I just could Elect you a PM