Tackle corruption to restore trust

Fighting corruption is a sure way of boosting public trust, but governments are not doing enough to address it. Some even have an interest in doing nothing at all. Yet increasing trust would bring widespread benefits.

Trust among citizens depends, to a large extent, on the governments’ actions to fight corruption. There is plenty of historical evidence to back this assertion. Yet there are still those in power who either leave the prevention of corruption for technical experts to take care of, without adequate political support, or who hinder anti-corruption efforts to protect themselves and their allies. This is a particularly risky ploy during periods of major economic or social turmoil, as public intolerance can be provoked, as many governments in the Middle East and North Africa, not to mention Eastern Europe, have recently shown.

If politicians were to take a look at the evidence of research alone, they would immediately draw two very simple conclusions: first, that countries with more corruption have lower levels of citizens’ trust, especially in government; and, second, countries with less corruption enjoy far higher levels of citizen trust.

But in reality, the issue is not always so straightforward. There is a relationship, but it is neither direct nor automatic.

The question is, of course, whether governments around the world–for whatever reason–understand the importance of citizen trust. They certainly talk about it quite a lot, and occasionally even ask citizens for their trust, but in most cases they only want this trust at election time. They might even appeal for more trust in times of crisis. But on TRUST the ground, there has been little if any real evidence of any specific anti-corruption efforts taking place, despite the fact that governments all know that such action would result in garnering the kind of trust that is sorely needed to overcome the crisis swiftly and effectively. Thus, with a relative degree of confidence, we can argue that not all governments are really serious about fighting corruption. They certainly behave as though their citizens were willing to put up with just about any level of corruption, as well as the austerity measures, increased taxes, welfare cuts and other severe measures that governments dish out during a crisis. Thankfully, citizens are not so fickle, and governments that ignore this point risk paying a high price in the future.

A successful fight against corruption influences a range of fronts, such as transparency; accountability; nondiscrimination; meaningful social, economic and civic participation; legal and income equality; and more. All of this matters to citizens in every country. Any improvement in these fronts shows that government genuinely cares about people and their welfare, and will be reflected in a higher trust level.

What does that higher trust mean? A look at the research shows what a successful fight against corruption really means. In fact, a decrease of just one index point in corruption levels would:

increase the school enrolment rate by 5 percentage points
increase life expectancy by 2.5 years
increase investments by 2.5 to 4.5 percentage points
decrease tax rate by 7.5 percentage points
increase public expenditures by 1.3 to 3 percentage points
increase GDP growth by 0.13 percentage points
increase GDP per capita by US$425.

More broadly, successfully tackling corruption leads to a wider acceptance of public institutions, decreased poverty and inequality levels, respect for the rule of law, and strengthened political stability. It means more non-partisan decision-making, improved civil and political rights, and more income equality. Successfully combating corruption leads to a fairer and more effective allocation of resources and talents, improved public expenditures, and less reliance on aid. It leads to higher productivity and more innovative thinking. And it means lower crime rates and a smaller shadow economy, etc.

A higher level of citizens’ trust is a key factor to making all of this happen. So why do so many governments come up short in the fight against corruption and not do so much more to win back public trust? The answer to this question is not complicated: while citizens and society as a whole benefit from the consequences of the efficient fight against corruption, some powerful individuals and their narrow circles of allies do not have the slightest interest in benefiting anyone but themselves. We have seen the sad truth of this in recent history, when corrupt leaders managed to empty state funds belonging to citizens into their own pockets. Trust finally collapsed, leading in some cases to public demonstrations to demand change. However, too many governments still do not appreciate how important trust is for everything else they have to do, and how much benefit they can derive from building trust up.

All of this demands considerable energy, resources and time from politicians, but there may be a shortcut to help them. Theorists call it “legal equality for all”. Ordinary citizens see it as “putting the bad guys behind the bars”. For policymakers, it means nothing more than properly engaging in executive and judicial branches of power and making sure that once untouchable individuals are subjected to proper police investigations, prosecutions and convictions. And if this happens, citizens will feel satisfied that the legal system works for everyone, regardless of their status, wealth or personal connections. Who knows, citizens may even begin respecting their politicians? Of course, this respect will only be short-lived if these basic measures are not accompanied by long-term efforts in the fight against corruption.

Unfortunately, some governments have no real serious intention to fight corruption, let alone put people behind bars. However, in our information, inter-connected, age, the international community and citizens know who they are. The public’s tolerance will not last forever. Therefore, it is time to step up pressure on all governments to fight corruption seriously, for everyone’s sake.

References

Bose, Niloy, Salvatore Capasso, and Antu Panini Murshid (2007), “Threshold effects of corruption: theory and evidence”, World Development Vol. 36, No.7 (pp. 1173-1191)

Carr, Indira and Opi Outhwaite (2008), “Surveying corruption in international business”, Manchester Journal of International Economic Law, Vol. 5, Issue 2 (pp. 3-70).

Dreher, Axel and Thomas Herzfeld (2005), “The economic costs of corruption: a survey and new evidence”, Thurgau Institute of Economics, Switzerland.

Evans, Bryan R., The cost of corruption, Tearfund – Christian action with the world’s poor, Teddington, UK.

Ivanchevich, John M., Robert Konopaske, and Jacqueline A. Gilbert (2008), “Formally shaming white-collar criminals”, Business Horizons, (2008) 51 (pp. 401 – 410), Kelley School of Business, Indiana University.

Kingston, Christofer (2007), “Social structure and cultures of corruption”, Journal of Economic Behaviour & Organization 67 (2008), (pp. 90-102)

Rothstein, Bo (2007), “Anti-corruption – a big bang theory”, The Quality of Government Institute, ISSN 1653-8919, Göteborg University, Göteborg.

Sullivan, John, Alexandr Shkolnikov (2008), “The costs of corruption”, Democracy around the world.

Torgler, Benno, Friedrich Schneider (2008), “The impact of tax morale and institutional quality on the shadow economy”, Journal of Economic Psychology, doi:10.1016/j.joep.2008.08.004.

OECD work on Bribery and Corruption

OECD Forum 2014 Issues