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Tailoring the Fight against Corruption to Country Circumstances

Shah, Anwar. 2007. Tailoring the Fight against Corruption to Country Circumstances. In Performance Accountability and Combating Corruption edited by Anwar Shah. Washington, D.C.: The World Bank.   

This chapter argues that a lack of progress in eradicating corruption in developing countries could be the result of misguided strategies based on weak analytical underpinnings and still weaker appreciation of the institutional environments of individual developing countries. Public sector corruption, as a symptom of failed governance, depends on a multitude of factors, such as the quality of public sector management, the nature of accountability relations between the government and citizens, the legal framework, and the degree to which public sector processes are accompanied by transparency and dissemination of information. Efforts to address corruption that fail to adequately account for these “drivers” are unlikely to generate profound and sustainable results.

 

To understand these drivers, a conceptual and empirical perspective is needed to understand why corruption persists and what can be a useful antidote.At the conceptual level, a number of interesting ideas have been put forward. These ideas can be broadly grouped together in three categories: principal-agent or agency models, New Public Management perspectives, and neo-institutional economics frameworks. All these models, especially the neo-institutional economics approach, predict that the generally pursuedanticorruption programs are unlikely to succeed, because they fail to change the incentives public managers face in conducting public business. The neo-institutional economics approach argues that corruption results from the opportunistic behavior of public officials, which reflects the fact that citizens either are not empowered or face high transaction costs to hold public officials accountable for their corrupt acts. The empirical evidence supports these conclusions on past failures. Shah argues that tackling corruption requires an indirect approach that addresses the root causes of corruption. He argues that because corruption is itself a symptom of fundamental governance failure, the higher the incidence of corruption, the less an anticorruption strategy should include tactics that are narrowly targeted to corrupt behaviors and the more it should focus on the broad underlying features of the governance environment. He argues that there is a pecking order of reform strategies based on a recognition of the broader institutional environmentin each country.

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