1. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 COMBATING CORRUPTION - Impact of Corruption on Developed and Developing Countries - notes prepared by Denis Osborne Director of Studies RIPA International, London Kuala Lumpur, February 2007 Strategies and Skills for a World in Change

2. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 ‘COMBAT’ AND ‘IMPACT’ Those who try to combat corruption in countries with developed or developing economies need:  To know the harmful impact of corruption in order to motivate all concerned to act  To know why people act corruptly and to understand the nature of corruption  To decide the objectives for any ‘combat’ and find strategies to achieve them

3. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 WHY BOTHER? THE ECONOMIC IMPACT  Costs to government and companies  Because competition made ineffective, in Milan bribes were 2 – 3%, ‘clean hands’ ‘op’ brought costs down 15 – 60%, who made profit?  Lost revenues (in some countries 50%)  those who pay gain most - ‘thought experiment’  Policies distorted; investment diverted  Is that Impact underestimated?  Is the economic Impact exaggerated?

4. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 WHY BOTHER? THE SOCIAL IMPACT CORRUPTION  Causes much hurt to minorities, women, and the poor, increasing poverty  poor cannot afford bribes; ‘relief’ diverted  Causes people to lose trust in each other  in the workplace, in families  and in government, politics, democracy  Leads to anger, frustration, conflict SOCIETY DISINTEGRATES

5. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 DAMAGE TO SECURITY  Less protection: regulations ignored, risks to  food, health, environment, roads, workplaces…  Nobody is safe  if a bribe gets me a driving licence when I drive badly, everybody is at risk!  More crime: drugs, rape, murder, terrorism, etc  criminals are safe if police take bribes  People live in fear – a global threat CORRUPTION KILLS

6. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 CITIZENS’ CONCERNS  Many not convinced about hurt to economy!  Damage understated, but importance over-rated?  ‘Corrupt’ countries (and companies) do well  More concern about loss of trust  risks of conflict in family, workplace, government  Most concern about unsafe food and drugs, increased crime, ‘terrorism’, loss of safety  True of all countries, whether with developing, developed or transitional economies?

7. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 THE EXPERIENCE OF CORRUPTION CORRUPTION COMES IN:  All sizes  Many forms  Two frequencies Not very often - Low Frequency, or Nearly always ‘VHF’ in any one group of activities  Is that true? If so, why? Difficult to explain and convince!

8. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 WHY DO PEOPLE ACT CORRUPTLY?  Personal greed, ‘everybody does it’, so ‘fair’  To help family and friends  an economy of affection  To hurt employers, managers  because ‘they’ treat us unfairly  because the bosses get rich by corrupt means  So people justify corrupt acts to themselves  Example: British householders ‘pay cash’ for work and the ‘honest builder’ goes bankrupt

9. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 A CRIME OF OPPORTUNITY Consider the staff in an office One short of cash… makes fraudulent expense claim because he thinks he can get away with it ‘just for once’ He does Then he does it again, and again… Tells his friend, who tells her friends… Until ‘everybody does it’  VHF corruption

10. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 THE CORRUPTION TRAP! Then somebody new joins the office staff…  If they don’t do the same, a problem…  that may expose the crime of those who do  They are urged to join in  and perhaps threatened if they don’t as for the police recruits in Hong Kong…  Many trapped in patterns of corrupt activity  Without restraints VHF corruption is the norm  We need to explain integrity, not corruption

11. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 VHF BRIBERY LF Few Restraints: VHF  ‘Everybody’ pays to get fair treatment  Employees learn, justify, demand  Much discussed  People complain, pay  No shame  Fear ‘group’  Trapped (HK) Strong Restraints: LF  A few people bribe to get unfair advantage  Few employees abuse position, take bribes  Seldom discussed  People, complacent  Bribery a shameful act  Guilty fear trouble!  if not, corruption  vhf

12. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 BUT BEWARE …  Nowhere is corruption zero, nowhere 100%  Perception may not reflect reality  Perceptions and experience differ for surveys  in South Africa, Malaysia, Nigeria, elsewhere…  But in some countries measures were similar  But perception is important, for …  trust, despair, encouraging the corrupt  And many stakeholders gain when corruption exaggerated (think who!)

13. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 RESTRAINT AND OPPORTUNITY  Rapid changes reduce effective restraints  Compare one-off deals with ‘regular customers’  Countries with developing and transitional economies as ‘Areas of Rapid Social Change’  Hence especially vulnerable…  …and initially much corruption came from ‘outside’ – from developed countries  But with increasing collusion, ‘all to blame’

14. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 CLARIFY AIMS, PRIORITIES HIGH FREQUENCY, ‘VHF’  Restore integrity, trust  Reduce corruption though risk never zero  Help change behaviour  Beware despair, disillusion  Give people hope  Attack, rescue!  Rebuild  Cure, relieve pain LOW FREQUENCY, LF  Maintain integrity, trust  Prevent corruption (outsiders try to subvert)  Sustain good behaviour  Beware complacency  Give warning of risks  Defend against invasion  Repair, strengthen  Immunize, inoculate

15. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 COMBAT OBJECTIVES?  Where VHF, what measures of success?  Not to fill prisons with all who act corruptly  But nobody in prison for ‘corruption’ because nobody acts corruptly.  Objectives?  Help people escape ‘corruption trap’  Help them change behaviour  Strategy?  To deter any tempted to act corruptly  To encourage people to help reduce corruption

16. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 ACTION TO DETER  Clarify laws, regulations, codes  speed courts  Chase the money  those who pay get benefit  Set up stings when corruption expected  And offer rewards for catching them  but warn ‘corrupt’ beforehand  Aim not ‘prison’, but change of behaviour Test integrity

17. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 ACTION TO ENCOURAGE  Sell the idea – ‘social marketing’ aiming to improve and strengthen…  Awareness  The damage done by corrupt acts  The success in some campaigns to reduce it  Attitudes  Wanting change, wanting to help bring it about  Action

18. www.ripainternational.co.ukwww.ripainternational.co.uk ; © Denis Osborne, 2007 LOOKING AHEAD… FOR FURTHER INFORMATION ABOUT THE IMPACT OF CORRUPTION AND WAYS TO HELP COMBAT CORRUPTION AND DETAILS OF ADVICE AND TRAINING PLEASE SEE: www.ripainternational.co.ukwww.ripainternational.co.uk and www.good-gov.infowww.good-gov.info or contact Anthony.Birch@Capita.co.ukAnthony.Birch@Capita.co.uk