Spring Reading: Corrupt Cities

Anonymous

Wed, 04/18/2012 - 03:00

Book Reviews

<a href="http://books.google.com/books?id=Bju8SS6mMjgC&dq=corrupt+cities&source=…
Cities: A Practical Guide to Cure and Prevention</a>, a book by
Robert Klitgaard, Ronald Maclean-Abaroa, and H. Lindsey Parris
(Institute for Contemporary Studies, 2000), is an excellent study
and analysis of municipal anti-corruption efforts primarily outside
of the United States. Much of what the authors recommend is of use
in the U.S., as well.

The authors define corruption simply and broadly: "the misuse
of office for personal gain." This includes acts of omission and
commission, legal and illegal activities, conduct internal to the
organization (e.g., embezzlement) or external (e.g., pay to play). 
They divide this into two kinds of corruption: primary corruption,
breaking a rule, like a foul in sports; and secondary corruption,
which is compared to "the breakdown of the rules defining and
enforcing fouls." They note that too much anti-corruption effort is
focused on primary corruption, that is, individual conduct, rather
than systematic (what I call "institutional") corruption, which is
far more damaging. 
 
Workshops on Corruption 
The authors believe in preventive measures more than punitive or
moralistic campaigns. The most exciting of the preventive measures
they describe is the workshop on corruption. A city begins with a
workshop that includes high-level officials, major business figures,
leaders of civic organizations, and an outside facilitator. The
ideal number of participants in each workshop is 20 to 25. The best
format is a retreat of a day or two, if possible, or two hours a day
for five days in a row. 
 
The workshop begins with a case study from another city where there
has been a successful anti-corruption campaign. "Participants see that
the problems can be analyzed coolly and dealt with effectively … The
mere fact that both successful analysis and successful action
occurred stills their skepticism and stimulates their creativity. …
[This helps] participants realize that corruption is not (just or
primarily) a problem of evil people but of corrupt systems. ... To
members of corrupt organizations, this insight often proves
therapeutic." 
 
Once emotions are taken out of the participants' view of corruption,
they are ready to begin to discuss their own situation. The same
approach is taken. "After some time, people turn out to be
remarkably forthcoming about the corruption that exists, how it
works, and how it might be prevented — even when their analyses
belie an intimate knowledge that can only be incriminating. In
systematically corrupt settings, many politicians and officials hold
complicated, mixed feelings about corruption. They may sincerely
loath it and wish to eradicate it, while at the same time participating
in it or allowing it to occur." 
 
What the authors find is that, if officials and employees are
permitted to discuss corruption in their organization analytically
and without fear of reprisal, they not only describe it better than
anyone else ever could, but they also are able to come up with a
plan for change. 
 
Hong Kong's Anti-Corruption Campaign 
Of the anti-corruption efforts the authors focus on, Hong Kong's is
the most valuable. First, let me quote a telling Hong Kong saying
about institutional corruption: "Either get on the
bus or run alongside the bus, but never stand in front of the bus." 
 
Hong Kong set up the Independent Commission against Corruption, a
kind of super agency to oversee anti-corruption efforts. An internal
anti-corruption office had led investigations, including the
examination of government employees' bank accounts, and dismissals
were made on the basis of unexplained enrichment. This did not
work. The next step was to shift the burden of proof to those
accused, but this didn't work either. Finally the internal
anti-corruption office was abolished in favor of the independent
commission, and the emphasis shifted to prevention and citizen
participation, although the commission also sought to "fry some big
fish," signaling that the rules of the game had changed. The new
commission also looked closely at practices and procedures within
government and public utilities to eliminate and simplify
unenforceable laws, cumbersome procedures, and ineffectual practices
conducive to corruption. 
 
The commission was guided and monitored by five citizen advisory
committees, which included government critics, and dealt with policy
as well as complaints. It had local offices to gather information,
did grassroots education about corruption; and did follow-up
relating to its recommendations. 
 
Dealing with Institutional Corruption 
The authors show how institutional corruption can be dealt with at
the same time as individual misconduct. "At the same time that the
alleged transgression is investigated, a broader study should be
undertaken of the class of the actions of which the transgression is
an instance. For example, if alleged bribery takes place in
procurement, the study interviews an array of private firms on a
confidential basis and develops a description of how the system of
procurement currently works, and whether corruption exists. The
study also makes recommendations for change." 
 
Anti-corruption efforts require both coordination and leadership.
And, the authors say, that leadership has to have political
authority, be in the public eye, and not be a boss. The
prototypes the authors describe are Hong Kong's Independent
Commission against Corruption and New York City's Inspector General
during the school construction scandal of the late 1980s. The IG's
office employed both deterrence (including financial recovery) and
opportunity blocking (debarment). It employed advisories where there
were suspected improprieties, certifications by principals of firms,
and an elaborate bidder pre-qualification process that provided the
IG's office with information that would otherwise have taken an
enormous amount of investigation to uncover. 
 
Valuable Observations 
The authors make some valuable observations about local government
corruption and campaigns against it: 
 
In a poor ethics environment, anyone operating on his own is in
trouble. 
 
"The costs of corruption are usually spread over a large number of
people, usually taxpayers. Because the benefits of preventing
corruption are also widespread, the logic of collective action
predicts that an effective interest group will be hard to mobilize
and sustain." 
 
"New laws and rules are most welcome when they change incentives,
reduce monopoly power, clarify or reduce discretion, and enhance
information and accountability." 
 
A corrupt police force can spread corruption to other agencies. 
 
"Corruption prefers a stable, secretive environment. By creating
enough discontinuity, uncertainty, and distrust, we hope to reduce
corruption." 
 
"Corruption tends to be reduced by the separation of powers; checks
and balances; transparency; a good system of justice; and clearly
defined roles, responsibilities, rules, and limits. … Corruption
loves multiple and complex regulations with ample and unshakable
official discretion." 
 
"Done correctly, a strategy for preventing corruption can be the
lever for a city's financial recovery, the reform of service
delivery, and involvement of citizens. Beyond the reduction in
malfeasance lies the prospect of reinventing local government." 
 
It is important that each agency confronts the others' perception of
its work. 
 
There's a Mexican saying about government officials, "They waste a
million to steal a thousand." In other words, focus on externalities
and incentives generated by corrupt activities, rather than the
amounts of money that change hands, which are only a small part of
the problem. 
 
An anti-corruption campaign needs to grab the low-hanging fruit, to
show that it is effective; fry a few big fish, to show that it is
serious; and then turn to prevention and reform of institutions,
which is what is really the goal. 
 
Municipal leaders should start not by attacking employees and
lower-level officials, but by taking positive steps: rewarding
efficiency and honesty, getting them involved in designing changes. 
 
It is important to remember that corruption in government is not
solely governmental, that it cannot exist without private
corruption. 
 
Robert Wechsler 
Director of Research-Retired, City Ethics 
 
203-859-1959

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