Definition of Corruption
The term corrupt originated from the Latin word- 'corruptus', which refers to abuse or destruction. And its literary meaning is utterly broken.
According to Wikipedia, corruption is spiritual or moral impurity or deviation from an ideal in philosophical, theological or ethical discussion.
UNODC (United Nations Office on Drugs and Crime) stated corruption as corruption is a serious crime that undermines social and economic development and weakens the fabric of modern-day society.
According to C.B. Mamoria, Social Problems and Social Disorganization, p-839: We may define corruption as an improper or selfish exercise of power and influence attached to a public office or a particularly public life position.
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According to Transparency International, corruption abuses entrusted power for private gain. It erodes trust, weakens democracy, hampers economic development and further exacerbates inequality, poverty, social division and the environmental crisis. Exposing corruption and holding it to account can only happen if we understand the way corruption works and the systems that enable it. Corruption can take many forms and can include behaviours like:
a) Public servants demanding or taking money or favours in exchange for services,
b) Politicians misusing public money or granting public jobs or contracts to their sponsors, friends and families,
c) Corporations bribing officials to get lucrative deals
Besides,
a) Corruption can happen anywhere: in business, government, the courts, the media, and civil society, as well as across all sectors from health and education to infrastructure and sports.
b) Corruption can involve anyone: politicians, government officials, public servants, business people or members of the public.
c) Corruption happens in the shadows, often with the help of professional enablers such as bankers, lawyers, accountants and real estate agents, opaque financial systems and anonymous shell companies that allow corruption schemes to flourish and the corrupt to launder and hide their illicit wealth.
d) Corruption adapts to different contexts and changing circumstances. It can evolve in response to rules, legislation, and even technology changes.
The costs of corruption
According to Transparency International,
a) Political costs: Your freedom and the rule of law.
b) Social costs: Your participation and even your trust in government.
c) Environmental costs: Your chance for a healthy environment and a sustainable future
d) Economic costs: Your opportunity to build and grow wealth
Corruption and crime are endemic sociological occurrences that appear regularly in virtually all countries globally in varying degrees and proportions. Each nation allocates domestic resources to control and regulate corruption and deter crime. Strategies undertaken to counter corruption are often summarized under the umbrella term anti-corruption. Additionally, global initiatives like the United Nations Sustainable Development Goal 16 also have a targeted goal to substantially reduce corruption in all of its forms.
Special Features of Corruption
1. It is one kind of crime that is serious in nature;
2. It is an inducement to wrong by bribery, embezzlement, nepotism and other unlawful means;
3. It is a departure from what is pure or correct;
4. It is an improper exercise of power and authority;
5. It is exercised for personal gain;
6. It influences individual, social and public life;
7. It is subsidence of national impression.
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Typology of Corruption
Corruption based on Scales
1. Petty corruption: Petty corruption occurs at a smaller scale and occurs at the implementation end of public services when public officials meet the public. For example, in many small areas such as registration offices, police stations, state licensing boards, and many other private and government sectors
2. Grand corruption: Grand corruption is defined as corruption occurring at the highest levels of government in a way that requires significant subversion of the political, legal and economic systems. Such corruption is commonly found in countries with authoritarian or dictatorial governments and those without adequate policing of corruption. The government system in many countries is divided into the legislative, executive and judicial branches in an attempt to provide independent services that are more minor subject to grand corruption due to their independence from one another.
3. Systematic corruption: Systemic corruption (or endemic corruption) is primarily due to the weaknesses of an organization or process. It can be contrasted with individual officials or agents who act corruptly within the system. Factors that encourage systemic corruption include conflicting incentives, discretionary powers; monopolistic powers; lack of transparency; low pay; and a culture of impunity. Specific acts of corruption include "bribery, extortion, and embezzlement" in a system where "corruption becomes the rule rather than the exception.
Corruption based on Sectors
1. Government/ public sector
2. Legislative/ political system
3. Executive/ police system
4. Judiciary system
5. Corporate
6. Unions
7. NGOs
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Forms of Corruption
United Nations Office on Drugs and Crime (UNODC) mentioned the following forms in United Nations Handbook on Practical Anti-Corruption Measures for Prosecutors and Investigators (2005).
Bribery
Bribery involves the improper use of gifts and favours in exchange for personal gain. This is also known as kickbacks or as baksheesh in the Middle East. It is a common form of corruption. The types of favours given are diverse and may include money, gifts, real estate, promotions, sexual favours, employee benefits, company shares, privileges, entertainment, employment and political benefits. Personal gain can be anything from actively giving preferential treatment to having an indiscretion or crime overlooked.
Embezzlement, theft, and fraud
Embezzlement and theft involve someone with access to funds or assets illegally controlling them. Fraud involves deception to convince the owner of funds or assets to give them up to an unauthorized party.
Graft
The political act of graft is when funds intended for public projects are intentionally misdirected to maximize the benefits to the private interests of the corrupt individuals.
Extortion and blackmail
While bribery uses positive inducements for corrupt aims, extortion and blackmail centre around the use of threats. This can be the threat of physical violence or false imprisonment and exposure of an individual's secrets or prior crimes. This includes such behaviour as an influential person threatening to go to the media if they do not receive speedy medical treatment (at the expense of other patients), threatening a public official with exposure of their secrets if they do not vote in a particular manner, or demanding money in exchange for continued secrecy. Another example could be a police officer being threatened with the loss of their job by their superiors if they continued investigating a high-ranking official.
Influence peddling
Influence peddling is the illegal practice of using one's influence in government or connections with persons in authority to obtain favours or preferential treatment, usually in return for payment.
Networking
Networking (both Business and Personal) can be an effective way for job-seekers to gain a competitive edge over others in the job market. The idea is to cultivate personal relationships with prospective employers, selection panellists, and others, hoping that these personal affections will influence future hiring decisions. This form of networking has been described as an attempt to corrupt formal hiring processes, where all candidates are given an equal opportunity to demonstrate their merits to selectors. The networker is accused of seeking a non-meritocratic advantage over other candidates based on personal fondness rather than any objective appraisal of which candidate is most qualified.
Abuse of discretion
Abuse of discretion refers to the misuse of one's powers and decision-making facilities. Examples include a judge improperly dismissing a criminal case or a customs official's discretion to allow a banned substance through a port.
Favouritism, nepotism, and clientelism
Favouritism, nepotism, and clientelism involve the favouring of not the perpetrator of corruption but someone related to them, such as a friend, family member or member of an association. Examples would include hiring or promoting a family member or staff member to a role they are not qualified for, who belongs to the same political party as you, regardless of merit.
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5 Forms of Corruption in Bangladesh
Anti Corruption Commission Bangladesh has mentioned the following five forms of corruption in Bangladesh.
a) Bribery: It is the offering of money, services or other valuables to persuade someone to do something in return. Kickbacks, baksheesh (tips), payola, hush money, sweetener, protection money, boodle, and gratuity.
b) Embezzlement: Taking of money, property or other valuables by the person to whom it has been entrusted for personal benefit.
c) Extortion: Demanding or taking money, property or other valuables through coercion and/or force. Synonyms include blackmail, bloodsucking and extraction.
d) Abuse of discretion: The abuse of office for private gain, but without external inducement or extortion. Patterns of such violations are usually associated with bureaucracies.
e) Improper political contributions: Payments made in an attempt to unduly influence present or future activities by a party or its members when they are in office.
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Corruption Situation in Bangladesh
Corruption is a vast and complex matter. It means any kind of dishonest, defiled or illegal behaviour, especially of people in authority. It is a significant problem in third world countries, but it has been the burning question in Bangladesh. The list of countries with rampant corruption has been headed by Bangladesh for several years. Transparency international found it the most corrupted government. Corruption may originate from want, immorality, lack of transparency, unsolved problems, unfinished works, vicious politics, weak administration, etc. All the government and the administration sectors are corrupted severely as well. Taking bribes, nepotism, and malpractice of power are the natures of corruption. No department of either government or non-government like ministry, office, school, college, university, law court, police station, hospital, etc., is beyond the reach of corruption. Even the victims of accidents and the dying patients are not left untouched by corruption. It has become customary in our country that nothing is done without the intervention of corruption. Our country's influential high officials and their assistants adopt such techniques and pretence to materialize their ill-motives that common people who are deprived of their legal rights. Corruption has a terrible effect on all parts of society. It leads the country to anarchism. Law and order situation has deteriorated for corruption. The difference between the poor and rich widens day by day. All the development procedures of the government become useless the cause of corruption. However, this is a humiliating condition for us as a nation. It has spoilt our image at home and abroad. Above all, foreign donors and investors become reluctant to observe the large scale practice of corruption. However, time has changed. With the same parade of the present government, all the people should voice against corruption. Nepotism, favouritism, red-tapism, biased attitude, etc., should be dealt with with an iron hand. Only our honest approaches can reinforce the government to ensure good governance. Inclusion corruption begets corruption. It should be prevented urgently in all spheres of our life. Otherwise, we will fail to build up a sound and potent generation. We should look forward to ensuring a corruption-free society and a corruption-free country. (Kabir, M. R. et al., (2021).
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Years | Place Bangladesh as the least corrupt nation | Total countries | Position of Bangladesh as a corrupt nation |
2010 | 134 | 178 | 12th |
2011 | 120 | 183 | 13th |
2012 | 144 | 176 | 13th |
2013 | 136 | - | 16th |
2014 | 145 | 175 | 14th |
2015 | 139 | - | 13th |
2016 | 145 | 176 | 15th |
2017 | 143 | 180 | 17th |
2018 | 149 | 180 | 13th |
2019 | 146 | 180 | 14th |
2020 | 146 | 180 | 12th |
Source: Corruption Perception Index- TI | |||
Causes of not reducing corruption in Bangladesh
1. The deficit of the effectiveness of the ACC;
2. The deficit intolerance of dissent;
3. The impact of the lackings of political integrity;
4. Powerful vested groups make different vital decisions that reflect a little bit of the public interest;
5. The deficit in the electoral integrity and transparency of political or electoral finance;
6. Lack of initiatives to address high-profile corruption;
7. The defective role of the state to mitigate financial and banking sector crises and the like.
Underlying Causes of Corruption
Per R. Klitgaard (1998), corruption will occur if the dishonest gain is greater than the penalty multiplied by the likelihood of being caught and prosecuted.
Since a high degree of monopoly and discretion accompanied by a low degree of transparency does not automatically lead to corruption, a fourth variable of "morality" or "integrity" has been introduced by others. The moral dimension has an intrinsic component and refers to a "mental problem". An extrinsic part refers to circumstances like poverty, inadequate remuneration, unacceptable work conditions and inoperable or overcomplicated procedures, which demoralize people and let them search for "alternative" solutions.
According to Dimant, E., & Tosato, G. (2018), the following factors have been attributed as causes of corruption:
a) Higher levels of bureaucracy and inefficient administrative structures
b) Low press freedom
c) Low economic freedom
d) Large ethnic divisions and high levels of in-group favouritism
e) Gender inequality
f) Poverty
g) Political instability
h) Weak property rights
i) Contagion from corrupt neighbouring countries
j) Low levels of education
k) Lack of commitment to society
l) Extravagant family
m) Unemployment
Comparing the most corrupt and least corrupt countries, the former group contains nations with substantial socio-economic inequalities. The latter includes nations with a high degree of social and economic justice.
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Major Six Causes of Corruption
According to C.B. Mamoria, six causes are identified to create corruption:
1. Economic insecurity
2. High rate of income tax
3. Merge the salary being paid to the Government servants
4. Emergence of new sources of wealth and power
5. The system of democracy
6. The very presence of black money
What corruption does do?
Most people are aware of the negative impact of corruption on a nation's economy. Corruption drains resources from much-needed investment in health, education, infrastructure and other essential services. Such resources are diverted from these well-meaning developmental programmes by selfish individuals for their personal use. It weakens democratic institutions, perverts the rule of law, discourages investment and aid, undercuts public confidence in government, feeds inequality and disenfranchises large population segments. It is a severe obstacle to development and should be 'nipped in the bud' with the aggressiveness it deserves.
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Corruption deprives the poor of government services.
The most significant impact of corruption is on the poor – those less able to absorb its cost. Illegally diversion of the corruption of the scarce resource undercuts the government's ability to provide essential services, such as health, education, public transportation or local policing, to its citizens. Petty corruption provides citizens additional costs for delivering even the most basic government activities. Moreover, it can jeopardize the health and safety of citizens through, for example, poorly designed infrastructure projects and scarce or outdated medical supplies.
Corruption lowers investment
Corruption increases the cost of acquisition and reduces investment returns. Investment is essential for the socio-economic development of the country. The Reduced level of investment retards economic growth and thus hampers national development.
Corruption hampers government activities.
Corruption like bribery, embezzlement, negligence in duties, nepotism etc., reduces the efficiency and competency of the concerned government officials. This, in turn, slowdowns the average speed of government activities.
Corruption destroys morality
Wholesale corruption destroys the moral base of the people. The citizens forget about their duties and responsibilities in their motherland. They only think about their personal gain and benefit, which damages the natural qualities of the people.
Corruption is the wastage of public money.
Corruption is rampant in Bangladesh. In a poor country like Bangladesh, the effect of corruption is devastating. Many of the funds allocated for various development programmers are wasted because of corruption.
The citizens of most developing countries like Bangladesh have continued to wallow in poverty, not because there are no deliberate government programmes to improve their standard of living, but because of the sheer greediness and selfishness exhibited by public officials entrusted with considerable resources to serve them. Corruption and all related crimes should not be tolerated. The devastating effects of corruption can no longer be ignored, and the fight against corruption must be taken as a personal challenge.
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Common effects of corruption
1. It causes widespread bitterness in those who cannot pay or refuse to pay for favours when they see those who do pay being favoured;
2. Corruption also enriches a few corrupt people at the expense of the majority;
3. It distorts standards when it enables those who less deserve to reach goals ahead of those of more outstanding merit.
4. It enables those who pay bribes to obtain favours and services to which they are not entitled;
5. When bribes are paid to law enforcement officers, respect for the law and the rule of law is lost;
6. It retards economic development by shifting services from the needy or priority areas. It furthers the social and economic marginalization of the poor, and if;
7. Allowed to expand unchecked, corruption erodes political legitimacy where citizens see little point in following the rules and might result in political instability.
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Corruption is a complex socio-political-economic phenomenon that affects all countries in different modes; such as:
1. It undermines democratic institutions;
2. It brings slow economic development with decreasing foreign investment;
3. It contributes to bringing governmental instability;
4. It creates frustration, depression and stress;
5. It enhances social discrimination through the unequal distribution of resources;
6. It increases family and social violence and disorganization;
7. It sticks out all kinds of crime and violation
9 Major impacts of corruption
Dimant, E., & Tosato, G. (2018) discussed the following effects of corruption in their article.
1. Bureaucratic Inefficiency: Corruption, in theory, should increase bureaucratic inefficiency. From a game theory perspective, those benefitting from the inefficient system by engaging in corrupt activities have no incentive to streamline the procedure. Thus, similarly to cultural values, corruption and bureaucratic inefficiency may be a vicious cycle. This theory received some initial empirical support in a paper that found that firms that pay bribes are more likely to spend more management time with bureaucrats (Kaufman and Wei, 1999). The theory received further support after 2006 in a paper that finds the presence of corrupt officials can lead to a bureaucratic delay in allocating licenses to productive individuals (Ahlin and Bose, 2007).
2. Business and (Local) Investment Climate: It has been argued that high levels of corruption will reduce a country's growth levels by affecting the investment climate or investment quality. This can occur due to inefficient public investment—even though investment levels may increase in absolute terms, absolute productivity may be reduced due to inefficient allocation of funds. Corruption can also lead to lower levels of infrastructure, thus deteriorating the investment climate of a nation. Early empirical evidence to support both these hypotheses was found in a paper that uses data from 69 countries from 1980 to 1983 (Tanzi and Davoodi, 1998). This was supported by a later study that also provided evidence to help the theory that corruption modifies the structure of public expenditure (De la Croix and Delavallade, 2009). A different study found that using data from different districts in Liberia in 2010, corruption reduces the willingness to contribute to public goods, thus damaging the local investment climate (Beekman et al., 2014). Reduction in investment quality was further evidenced in a paper that, using Italian public works data from 2000 to 2005, found higher levels of corruption resulted in less efficient infrastructure expenditure (Castro et al., 2014). Another study that used data from 80 municipalities in the Philippines also found that corruption affects the local investment climate by deteriorating the health outcomes of its population (Azfar and Gurgur, 2008).
3. Civil and Political Rights: Theoretically, corruption is believed to affect institutions so that the protection and promotion of human rights are reduced. One would thus expect a negative relationship between the two. A paper using cross country data focusing on human rights and governance found that countries with higher levels of corruption have lower levels of political and civil liberties (Kaufmann, 2004). A later study that focused more specifically on corruption and human rights found that using data from 186 countries for the period 1980–2004 and three corruption measures, there was a positive relationship between corruption and human rights. However, not all the measures of corruption were statistically significant (Landman and Schudel, 2007).
4. Economic Growth: Theoretical arguments have been made for the effects of corruption on economic growth via lower levels of investment, lower quality of investment, higher levels of indirect taxation, and misallocation of resources due to distorted incentives. Large amounts of empirical studies have been published to support these theories, and papers provided evidence that there was a significant relationship between the allocation of talent to unproductive activities and corruption and higher levels of indirect taxation and corruption, thereby reducing growth rates (Tanzi and Davoodi, 2001). later paper that focused on the effects of corruption on economic growth in the United States found that states with higher levels of corruption had lower levels of economic development (Glaeser and Saks, 2006). A later study that used data from 60 countries and accounted for a country's level of economic freedom found slightly different results: their results indicate that corruption reduces (increases) economic growth in countries in which financial freedom is low (high) (Swaleheen and Stansel, 2007). later paper countered this study by suggesting that evidence for the "grease the wheel hypothesis" is fragile, that there is a robust negative correlation between wealth per capita and corruption, and that the effect of corruption on GDP per capita will lead to unsustainable development (Aidt, 2009).
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5. Foreign Direct Investment: Attempting to invest in a foreign country often requires a general permit. In corrupt countries, it is more likely that obtaining such a permit may require a form of bribe, thus increasing the cost of engaging in such activities and reducing the overall levels of FDI. In addition, some individuals or firms will choose not to engage in such corrupt practices and, thus, may simply avoid economic relations with such countries, again reducing levels of foreign direct investment in absolute terms. An empirical study that used data from the World Bank in 1997 found evidence to support that higher levels of corruption were significantly associated with lower levels of investment. However, this relationship was much weaker when the levels of corruption were considered very predictable (Campos et al., 1999). O e notable exception to the relationship between crime and FDI is the study by Egger and Winner (2005). They use data from a sample of 73 developed and less developed countries from 1995–to 1999. T eir results support a clear positive relationship between corruption and FDI. However, more recent studies support the negative impact of corruption on FDI. Exemplarily, a study used data from 20 OECD source countries and 52 host countries over the period 1996–2003. I was found that even though corruption reduced FDI overall, this was not the case if the country had previously received high levels of FDI (such as China), but especially the case if the government had low levels of FDI (such as Venezuela) (Barassi and Zhou, 2012). M re recent studies confirmed this negative relationship (cf. Busse and Hefeker, 2007; Al-Sadig, 2009; Mathur and Singh, 2013).
6. Income Inequality/Poverty: It has been argued that corruption increases income inequality and poverty by lowering growth levels, having a biased tax system, poor quality social programs, education inequality and asset ownership bias (Gupta et al., 2002). Gu ta's empirical study provides evidence that an increase in corruption results in both higher inequality (measured using the Gini coefficient) and an increase in the percentage of poverty (Gupta et al., 2002). Gy mah-Brempong and de Camacho (2006) use panel data from 61 countries over 20 years to investigate regional differences in the effect of corruption on income distribution. Their results suggest that corruption indeed breeds income inequality, with the most significant effects in Latin American and African countries. More recent research is at odds with these findings, although mainly for Latin America. Do son and Ramlogan-Dobson (2010) and Andres and Ramlogan-Dobson (2011) find an inverse relationship between corruption and income inequality in Latin America, suggesting that institutional reform policies that are in place are misguided.
7. International Trade: In a similar manner to engaging in foreign direct investment, international trade most often requires a publicly issued license or permit. In nations with higher levels of corruption, the costs associated with acquiring the necessary support and permits may be exceptionally high due to the need to pay bribes etc. Thus, it is theorized that higher levels of corruption harm levels of international trade. Frequently, the levels of corruption within institutions associated with trade impact levels of trade. Th s assertion has been reinforced empirically by a study that found that the increased perceived uncertainty of a country's institutions relevant to trade is negatively correlated with the level of international trade (Bugel, 2010). An analysis of the relationship between corruption and ¨ trade in African nations similarly found a negative relationship between corruption and trade (Musila and Sigue, 2010). The s is strengthened by another paper that found that corruption insecurity acts as a hidden tax on trade (Anderson and Marcouiller, 2002). In arrestingly, some studies have looked at the effect of corruption on the importing state and the exporting state. A recent study found that corruption generally has a more powerful impact on the exporting country.
8. Political Legitimacy: From a theoretical standpoint, it has been argued that for a political system to function, it must be considered legitimate, both nationally and internationally. An academic assessment by Bo Rothstein and Jan Teorell asserts that people determine and value political legitimacy through lack of corruption, lack of discrimination, and the quality of governance (Rothstein, 2008). Thus, corruption undermines such legitimacy. An early study found empirical support for this theory; when using data from 16 mature economies, it was found that individuals residing in more corrupt economies expressed more negative reviews of the performance of their political system (Anderson and Tverdova, 2003). Another study found some evidence to support this theory using data from studies conducted by Vanderbilt University (Seligson, 2006). A different study, which sought to determine what makes a state legitimate, using data from 72 other countries, found that general governance was a highly significant element, of which corruption was a factor (Gilley, 2006).
9. Shadow Economic: In theory, corruption can be viewed as a measure of taxation that might make entrepreneurs economically rational to go underground. Ho ever, as Dreher and Schneider (2010) point out, one should differentiate between high- and low-income countries: countries with high incomes have a wealth of public goods (such as legal institutions) that may lead to corruption to be a substitution for the shadow economy whereas in low-income countries the two may be compliments. A similar examination looks at the relationship between corruption and the shadow economy concerning income to reveal that the shadow economy reduces corruption in high-income countries while increasing corruption in low-income states (Schneider and Buehn, 2009). An early study created a model that suggested that corruption and shadow markets are substitutes (Choi and Thum, 2005); this received support in a later paper that re-examined the relationship (Dreher et al., 2009). An empirical study finds that using cross-sectional data for 98 countries, there is no robust relationship when perception-based indices are used. However, when using an index based on a structural model, shadow economies and corruption complement countries with low incomes (Dreher and Schneider, 2010). Mo e evidence was found in a later paper that focused on the effects of decentralization on both corruption and the shadow economy. Thus report found a positive relationship between the two using data from several indices for corruption and the shadow economy from 145 countries (Dell'Anno and Teobaldelli, 2015).