“Corruption is an economic crime,” Prof Klitgaard

ACC: With studies showing businessmen dedicating at least 30 percent of their time cultivating relationships with government officials to get things done faster, there is now a business interest in reducing corruption globally.
Prof Robert Klitgaard, who is in the country to speak to participants at the Royal Institute of Governance and Strategic Studies (RIGGS), told Kuensel that red tapes, regulations and sluggishness in doing business could tempt corrupt practices.
“Because you are in a system where you have to get corrupt to get a contract or a permit although you don’t want to,” said the professor from Claremont Graduate University.
Prof Klitgaard has a Ph.D. in policy analysis and advises governments and institutions around the world on economic strategy and institutional reform.   “Corruption is an economic crime,” he said.
The formula, corruption is equal to monopoly plus discretion minus accountability (C=M+D-A), he said, implies that to reduce corruption, governments must try to reduce monopoly and enhance competition, limit official discretion and clarify the rules of the game with enhanced accountability.
Although red tape and regulation is correlated with corruption, he said Bhutan has less corruption with a unique development philosophy.

The cost of corruption
Many assume that the cost Anti-Corruption Commission (ACC) incurs in investigating and prosecuting cases is high.
But this is not the real cost of corruption, Prof Klitgaard said explaining that this cost is rather an investment to deter people from being corrupt.
“This cost is for implementing a law that benefits the society and reduce the overall cost of corruption,” he said.
While some international organisations have calculated the amount of bribe or the money embezzled as the cost of corruption, there is also the social cost, which is difficult to monetise.
He explained that if a builder gives 20 percent kickback to a government official in building a road, the cost of the project increases by 20 percent.
Citing another example, he said if unsafe buildings were constructed after bribing officials and the buildings collapse, what could be the cost of the lives lost?
“What is the cost of demotivating hardworking people?” he said adding these are some tricky issues in deducing the cost of corruption.
For Bhutan, he said corruption could slow down the 11th Plan and push it in the wrong direction besides demotivating honest people.

The big risk
Bhutan should be more vigilant on big infrastructure projects like hydropower and road because these areas have so much money that could allure corruption.
Prof Klitgaard said the risk is even bigger because India is funding all these major projects involving Indian contractors.
“India is one of the most corrupt countries,” he said. “The cost escalation of projects is often a sign of inefficiency or corruption.”
He said it is also the supply and demand chain that attracts corruption and if there is market for bribes, people will bribe.
The way forward, he said, is to have a proactive and positive approach instead of a negative approach that evokes people. For instance, he suggested celebrating the success of institutions where there is big improvement in reducing corruption.
“Lessons can also be discerned about the politics of anti-corruption. Identify and mobilise allies. Fry big fish. Diagnose and subvert corrupt systems. Do a few things that can show results in six months, to build momentum. Don’t try to do everything at once,” he said.
Even politicians are ready to move when several forces converge because around the world, elections are being fought with corruption as a key issue.
“In my experience, many new presidents, governors, ministers, and mayors are eager to reduce corruption because they know that corruption is constraining development.”
By Tshering Dorji

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