Corruption

Corruption is a social menace found in both public and private circles. For the purpose of this work, we are concerned with public corruption otherwise known as official corruption. The World Bank and Transparency International (TI) define it as the abuse of public office for private benefits (World Bank 1997: 8; TI 1996). The Black’s Law Dictionary (Garner 2004: 371) gives a similar definition of corruption as “The act of doing something with an intent to give some advantage inconsistent with official duty and the rights of others; a fiduciary’s or official’s use of a station or office to procure some benefit either personally or for someone else, contrary to the rights of others.” Hope (2000: 18) succinctly puts it “as partisanship that challenges statesmanship”. But broadly, he describes it to mean:

The utilization of official positions or titles for personal or private gain, either on an individual or collective basis, at the expense of the public good in violation of established rules and ethical considerations, and through the direct or indirect participation of one or more public officials whether they be politicians or bureaucrats (ibid).

According to Underkuffler (2005), approaches to the idea of corruption could be categorized into three broad theories: (i) Shell theories which define corruption as violation of law or violation of duty; (ii) Substantive theories which define corruption as betrayal or violation of public interest; and (iii) Economic theories which view corruption in economic terms i.e. whether economically evil or good. These traditional theories, she argues, do not adequately define corruption. Corruption is more than violation of established rules; more than a breach of public duty. To say that A is corrupt is a statement not only of what A has done, but of what A has become. Corruption is capture by evil so that if A is corrupt in one case, we believe he will act so in every case. This idea of capture by evil, she argues, drives our understanding of corruption in law. It drives our understanding of corrupt judges for instance who, once corrupt, we believe will act in a similar manner in every other case. “It drives our understanding of corruption as a systemic effect and

systemic influence, which presents institutional dangers that are greater than other crimes, and that requires purgation rather than simple law enforcement”.

i. Conception of the Public

Definitions of corruption like the above ones are based on the conception of the public domain as separate from the private domain. This conception is strongly influenced by Max Weber’s theory of rational-legal bureaucracy. The bureaucracy “is run by hierarchically ordered corps of officials who are recruited and promoted according to objective criteria such as educational qualification and professional experience; who are paid a regular salary which is graded according to rank and qualifications; and who are allocated fixed jurisdictional areas governed by clearly laid down rules and procedures. The core characteristics of this type of bureaucracy are impartiality, impersonality, and above all, the strict separation of incumbent and office” (Theobald 1990: 2). This form of bureaucratic organisation does of course exist now in all areas of human activity. But it is in the state apparatus where it first emerged. The development of the nation-state in the 19th century resulted in the consolidation of modern public administration; the appearance of the career public servant who allegedly makes decisions on the basis of neutral, universalistic criteria and scrupulously segregates public affairs from private interests (ibid: 3).12

Weber was obviously thinking of administrators and not elected politicians when he formulated his ideal type. But the fact that politicians once elected occupy public office and are required to perform their duties according to laid down rules and procedure makes them inclusive in his typology. In the case of Nigeria for instance,

12_{It has been argued that what administrators do is politics and not administration as is simply put.}

“All bureaucratic decisions are political in the sense that they are made by individuals who are located within a context of (invariably hierarchical) authority and power, and whose behaviour cannot but be influenced by interests, ambitions, fears, frustrations, the desire for status, achievement or the need for a quiet life, not to mention the complexities of informal group interaction. Hence the image of the civil servant meticulously working through established rules and procedures to reach an objective decision is, to say the least, simplistic” (Downs 1967 in Theobald 1990: 13). However, the difference between administration and politics may be one of degree and not of kind and the degree to which administrative roles are politicized is central to the understanding of corruption (Theobald 1990: 18).

the Constitution provides formal qualifications for vying for elected posts (sections 65; 106; 131; 177 of 1999 Constitution); binds elected politicians to a code of conduct in the discharge of their duties (Fifth Schedule, Part I of 1999 Constitution); and unambiguously mentions them in the definition of public officers (section 19, Fifth Schedule, Part I of 1999 Constitution).

It may be argued that the idea of public office is a Western conception. In Africa for instance, the line of distinction between the public and private is thin if at all it exists. Nepotism, patronage and bribery in the form of gift-giving are socially approved. A public officer who denies himself, his kith and kin favours which he could afford to render by virtue of his office may be blame-worthy. However, it is difficult for such arguments to hold in modern day societies. The development of the modern state is not limited to the Western countries. One of the effects of globalizing processes such as colonialism is such that hitherto ‘primitive’ societies have transformed into ‘civilized’ ones with all characteristics of modern states. In Chapter 5, we shall see for instance how formal law brought by the British colonial administration displaced customary law as the dominant law governing state practice in Nigeria. Though the practices of nepotism, patronage and gift-giving may still exist, they are by no means lawful or approved of at least at the level of formal public administration.13Theobald (1990: 9-10) is therefore correct when he says that “in the light of the formal acceptance by virtually every government in the world of the desirability of efficient and honest government it seems difficult to avoid using public office as the yardstick against which corruption is measured”.

Obviously, public corruption could take many forms. Money does not need to exchange hands before an act is categorized as corruption. Provided an act is done or omitted to be done consciously by a public officer in violation of established rules and procedure and for his or someone else’s private benefit, it qualifies to be corruption. For instance, it is corruption for an electoral officer to commit an electoral fraud e.g. in the form of rigging elections, or for a public officer to grant a

public scholarship to an undeserving acquaintance, or for a university lecturer to award undeserved examination score to a candidate even when no financial reward is taken in return. Because corruption is so wide, I shall limit my discussion about it as it affects public funds. As we shall see in Chapter 5, the arm of government which is in charge of these funds is the executive therefore the bulk of the discussion on corruption revolves it. Mention is also made of corruption in the legislative circles because the constitution gives it certain financial powers such as authorization of withdrawal of monies by the executive. Although the judiciary in Nigeria is far from being corrupt-free, corruption in that institution is not covered in this thesis because it neither holds public funds (apart from its allocation to cover running costs etc.) nor does it have financial powers.

Even when limited to public funds, corruption could take mainly three different forms. First is petty corruption which involves small scale corruption routinely taking place between members of the public and minor public officers such as the police, customs or judicial officers. Second is grand corruption which takes place at a higher level. It involves larger amount of money and more senior public officers. It is manifested in kickbacks or embezzling public funds. It is most prevalent in public works contracts such as building roads, schools, hospitals, etc. and in privatization of public enterprises. Third is state capture or looting. It involves “scams whose figures are so huge that when they are successfully concluded they have macroeconomic implications fairly quickly – they cause banks to collapse, inflation to rise, the exchange rate to decline” (Hassan 2004). All these forms of corruption are pernicious to development. Though all are prevalent in Nigeria, most of our discussion in the thesis will be focused on the second and (occasionally) third forms.

Corruption is an ubiquitous problem. Neither developing nor developed countries are immune from it. In the UK for instance, there was the cash for honours scandal

which rocked the Blair government in its twilight.14There was also the corruption scandal from the Saudi Arabian contract with the BAE Systems (British Aerospace) on arms.15 In the US, it has been reported that between 1994 and 2002 approximately $240 billion in government contracts, representing as many as 484 major offshore contracts, involved bribes to foreign officials (Brown and Shackman 2007).16Thus corruption is a universally prevalent practice varying in degree and subtlety. But as evidence shows, it is more prevalent in developing countries (Theobald 1990). The annual assessment by TI corroborates this evidence.

ii. Consequences of Corruption

It is often argued that where corruption helps to surmount bureaucratic red-tapism and inefficiency in a public system, it is not necessarily anti-development or it can even promote development17(Nye 1967; Theobald 1990: 6, 116-125; Robinson 1998; Smith 2007: 185-187). In any case, its negative effects have far outweighed the positive ones, if any. Among its negative consequences, corruption increases operational costs and reduces profits and benefits; it creates distrust of public officers and hence constitutes social obstacle to execution of projects; it weakens government by making policy-makers timid in taking bold steps to curb excesses of citizens or to reform the system; it discourages payment of taxes and the practice of saving schemes for social development (Gbefwi in Ayua & Guobadia 2001: 639- 640; Hope in Hope and Chikulo 2000: 23; Theobald 1990: 125-130; Smith 2007: 182-185).

Corruption also leads to loss of image and prestige of a nation; weakens the moral fibre of the people; lowers ethical standards in governance; widens gap between the rich and the poor; burdens the poor and consequently increases social instability and

14_{This issue led to an unprecedented interviewing of the Prime Minister by the Police. See}

http://www.telegraph.co.uk/news/uknews/1555961/Blair's-cash-for-honours-secret.html.

15_{The government suppressed this issue in the name of national security as the UK is in alliance}

with the Saudi government in the fight against terrorism. But recently the High Court blamed the Serious Fraud Office for the suppression (The Guardian[UK] of 11/4/08).

16_{For more examples of corruption in developed countries, see for instance Theobald (1990: 46-75).} 17_{I.e. it can ‘grease the wheels’.}

insecurity; deters foreign and domestic investment and reduces rate of economic growth; undermines confidence and trust in government and public institutions; skews national strategies and plans; brings inequality, inflation and crime; makes state repressive; affects political stability; lowers GDP per head; and exacerbates budgetary problems and often forces unplanned resource reallocation (Nye 1967; Mauro 1995; Robinson 1998; Rose-Ackerman 1999: 2-3, 9-25; Hassan 2004; Lambsdorff 2005; Hope in Hope and Chikulo 2000: 23-26; Senior 2006: 168-180; Mbaku 2007: 102-109; Smith 2007: 180-185).

Among the various consequences of corruption identified above, this thesis is more concerned with its impact on development. The cumulative effect of all its consequences could be said to be adverse to development. But there are ways in which it directly affects development. For instance, resources which would otherwise be used in development are lost through corruption. It diverts public investment away from essential development aspects such as education and health into capital intensive projects such as airports, stadia where bribes and kickbacks are more plentiful. In a statistical comparison of 90 countries, it was found that there is “negative, significant and robust relationship between corruption and government expenditure on education” (Mauro 2002 in Smith 2007: 180). Smith (2007: 180) further confirms why this is so when he says that “there are fewer opportunities for bribery within educational projects compared with high- technology purchases made from oligopolies by government’s investing in large- scale capital expenditure, such as defence procurements and construction projects.” It is no wonder then that the Nigerian political office holder would often dodge legitimate demands from the electorate in his constituency for basic necessities of life such as water and drugs and instead embark on providing them with “the most modern television station in Africa” (Achebe 1984: 24-25).

The Utstein Anticorruption Resource Center finds that corruption impedes development and perpetuates and exacerbates poverty in a variety of ways which include:

a. Diverting resources and benefits towards the rich and away from the poor; b. Disturbing the pattern of public spending and investment by encouraging

large capital-intensive projects to maximize bribe receipts;

c. Imposing an additional unofficial ‘tax’ which the poor are least able to pay; d. Reducing tax revenues to government which reduces public services that

benefit the poor;

e. Undermining social and political stability with consequences that leave the poor more insecure;

f. Reducing economic growth which reduces the opportunities for the poor to escape from poverty;

g. Perpetuating social exclusion and preventing the poor from acquiring the capability to challenge inequalities of power and resources; and

h. Depriving the poor of their rights and entitlements (Hassan 2004).

Barring the dependency theory,18 there is no gainsaying the fact that Africa’s underdevelopment is to a large extent linked to corruption. The impact of corruption on development in Africa has been described in the following words:

That corruption adversely affects the development process in developing countries is no longer in doubt…. The corruption/development nexus is of special concern in poor countries such as are found in Africa. Those who pay and receive bribes can expropriate a nation’s limited wealth. However, even countries endowed with natural resources (some of which are also found in Africa) may fail to develop under a regime of systemic corruption…Nigeria and the former Zaire (under Mobutu) are classic examples of this latter observation (Hope and Chikulo (2000: 2).

Real examples of how corruption expropriates a nation’s wealth abound. For instance, the World Bank has reported that an estimated total of $160 million had been taken as bribes by civil servants in Mozambique, an equivalent of 90% of the government’s budget (Gbefwi in Ayua & Guobadia 2001: 640). In Zimbabwe, the

government lost a total of US$3 million in 1991 and more recently about 5 per cent of the country’s annual economic output (equivalent to US$300 million) owing to corruption. In Mali, the former Head of State, Moussa Traore, looted over US$2 billion, an amount equal to the size of the country’s foreign debt in 1992. In Kenya, corruption in state enterprises has been costing the country an average of US$104.5 million annually. And within six years in the mid 1990s, the Chief Executives of the country’s 56 state firms misappropriated US$627 million, an amount equivalent to 1.2 times the amount the country received in official development assistance in 1994 (Hope in Hope and Chikulo 2000: 24). In Chad, a survey in 2004 discovered that less than 1 per cent of money released by the Ministry of Finance meant for rural health clinics actually reached the clinics – over 99 per cent had been lost to corruption (Collier 2008: 66). We shall see detailed examples from Nigeria in Chapter 4.

iii. Causes of Corruption

Some of the consequences of corruption might as well be said to constitute its causes. For instance, lower GDP, inflation and inequality could belong to either side. But just like the consequences, the causes of corruption too are multifaceted and there is hardly any agreement on them. For instance, corruption may be attributed to the size of government or country. Where a government or country is large, bribes to public officers would be on the increase as it would be difficult to establish decent administration and to monitor the officers. It may be argued however that whether or not power is centralized is what is crucial in the level of corruption. For instance, evidence has been reported that federal states (like Nigeria) are more corrupt than centralized ones (Lambsdorff 2005). According to Montinola and Jackman (2002), the size of government does not systematically affect corruption, but membership of the Organisation of Petroleum Exporting Countries (OPEC) does because of the states distinctive “high degree of direct engagement in national economic issues”.

Corruption is also said to be caused by higher regulatory barriers to market entry; vague and lax government regulations; highly diversified trade tariff (as opposed to uniform rates); low level of competition among private firms sometimes spurred by government’s restrictions on economic freedom; recruitment not based on merit; poor wages and salaries; lack of commitment to religion; personal dishonesty; non- free media; trade restrictions; high fiscal burdens; high level of government intervention; unethical leadership; expanded role of state activity; nepotism towards family, friends; etc. (Lambsdorff 2005; Hope and Chikulo 2000: 13; Hope in Hope and Chikulo 2000: 20; Senior 2006: 127-159; Montinola and Jackman 2002; Mbaku 2007: 64-68). One could hardly single out one factor causing corruption. Similarly, unambiguous evidence of causal linkage between variables and the concept of corruption is hard to come by. But one cannot doubt the fact that a combination of many factors would reinforce one another to result in corruption.

Though the above causes of corruption are relevant, this thesis does not seek to link the development-impeding corruption it complains about to any of them. It is more interested in the linkage between corruption and the rule of law arguing that absence of rule of law in practice is responsible for the high level of corruption. A study close to this area is the relationship between corruption and institutions. For instance, the impact of the press and the judiciary on corruption is not an uncovered field. It is commonly agreed that a free press could deter corruption through exposing it (Brunetti & Weder 2003 in Lambsdorff 2005). This suggests that where the press is gagged and inhibited for any reason from performing its duty as watchdog of the society, a situation favourable to corruption is created.

Similarly, lack of de facto prosecutorial independence is seen as increasing corruption which means de jure independence could exist side by side with corruption as the more the corruption, the more willingness of the executive to pay