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Corruption and business growth and development: The setting - Thoughts from GNCCI - Conceptual explanations of corruption

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Conceptual explanations of corruption

There are generally no controversies about the definition of corruption. Several authors and international organizations define it as the misuse or abuse of public office for private gain. This definition fall a little short by neglecting abuses of office for private gain that occurs in the private sector without the involvement of public officials. Transparency International (2006) provided a more encompassing definition that corruption is the misuse of entrusted power for private gain.

In this respect, the focus is “entrusted power” and its misuse, regardless of which sector it resides in. In reality however, attention is often devoted to the public sector because that is where the deleterious effects are felt most, particularly in developing countries, even though it also has ominous effects in the private sector due to the dislocation of resources that accompanies it.

UNDP classifies corruption into two types: spontaneous and institutionalized or systemic. It explains that spontaneous corruption is usually found in societies observing strong ethics and morals in public service, while institutionalized corruption, on the other hand, is found in societies, including Ghana, where corrupt behaviors are perennially extensive or pervasive. In these societies, corruption has become a way of life, a goal, and an outlook towards “public” office. In Ghana, this often explains the reasons why people prefer to work in places like Customs, Police, Driver and Vehicle Licensing Authority, Revenue Services, Immigration, and Land Registration departments.

The typology has been further expatiated on as comprising grand corruption, bureaucratic corruption, and legislative corruption. From that point of view, grand corruption refers to exploitation of power by political elites to fashion national policies that tend to serve their interests at the expense of the general populace.

This type of corruption is difficult to identify and measure especially when at least some segments of the population will gain. However, it is easier to measure and study under dictatorships who make policy decisions that serve their interests exclusively, and where there is usually no distinction between the dictators’ own wealth and that of their countries. Bureaucratic corruption is the corrupt acts of the appointed bureaucrats in their dealings with either their superiors or with the public.

In its most common form, usually known as petty corruption, the public may be required to bribe bureaucrats either to receive a service to which they are entitled or to speed up a bureaucratic procedure. Legislative corruption, including “vote-buying”, is the manner and the extent to which the voting behavior of legislators can be influenced through bribery by interest groups to enact legislation that can change the economic rents associated with assets.

The typology can be further disaggregated into high-level corruption and low-level corruption. High level corruption or organized corruption results in kickbacks in the award of expensive contracts, the creation of a register of ghost employees, duplication of state agencies, establishment of agencies with overlapping functions, and excessive centralization of appointing authority, and they can  involve syndicates comprising members from various governmental offices such as the central bank, controller and accountant general departments, judiciary or attorney-general’s office, finance ministry, trade ministries, revenue agencies, registration agencies and other allied offices. There can be an intricate network of alliances and collusions such that the corrupt practices take longer to detect and once detected they become difficult to prove because of the nature of the web. On the other hand, low-level or chaotic corruption includes bribes paid at licensing offices, immigration/passport offices, and registration offices, where several targets have to be satisfied before the service is delivered. Its effects are immediately felt in delays and unsatisfactory service, and the victims are often the less privileged in society, and because of its nature there is very little incentive to curtail it. The two types co-exist in reality, and they are prevalent in countries where the moral and ethical standards for conducting business are low. 

Transparency International has also characterized corruption with similar typologies. They classified corruption as grand, petty and political, depending on the pecuniary value and sector of the economy in which the activity occurs. They explain that grand corruption occurs at the high level of state or government with the connivance of leaders or politicians, while petty corruption connotes the abuse of office or entrusted power by low- and mid-level public officials in their interactions with the ordinary citizens. In this respect we can consider the activities of office holders at licensing and permit issuing organizations as falling into the category.

The World Bank enterprise survey in 2013, for instance, found that Ghana fared worse with respect to bribes for issuing licenses and permits when compared to sub-Sahara Africa and low income countries. According to Transparency International, political corruption is the manipulation of policies, institutions and rules of procedure to perpetuate the hold on electoral power and executive control of state resources.

The above setting and conceptual explanations, provide the stage for us to discuss the causes and manifestations in the second part of the series. It is our assumption that, understanding the causes and manifestations will give all of us clearer insights into the phenomenon and motivate us to address it.  

The writer is with the Ghana National Chamber of Commerce & Industry (GNCCI)

Published in the Business & Financial Times

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The Ghana National Chamber of Commerce is an association of business operators, firms and industries with interests spanning every sector of private enterprise in Ghana. Read more

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