293 – Two ways in dealing with corruption

Posted on July 25, 2014 by

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Corruption – the improper mixing of public and private interest – is one of the scourges of contemporary society. How should we go about fighting it?

The Western way is the “rule of law:” legislation defines what corruption is, and an independent judiciary pursues those breaking the law – first indicted, first tried. Separation and independence are the hallmarks.

The devil is, of course, in the detail. Let me elaborate.

  • When corruption is nestled in the law. A corrupt political system will cleverly hide corruption in the very words (and wooly wordings) of the law.[1] Relabeled as “business incentives” and “sponsoring,” culpable favors become legitimate “way of creating a favorable business climate.” There are other, subtle ways: culpable omissions (in the legislative texts, but also in the implementation process). Lack of transparency in state-enterprise relations – under cover of “protecting business secrets” – can also be very effective.[2] The matter is not made easier by the privatization drive, which has outsourced many sovereign functions without corresponding safeguards.[3].
  • The new currency of corruption: power. Our understanding of corruption is tied to the individual act and the monetary transaction – personal graft in brown bags is the cliché. But this form of corruption has a passé feeling about it. Money begets political power, and political power begets money. When corruption becomes a system and a caste culture emerges, the culpable intent is no longer traceable. Power is a currency leaving no trace in a bank account. Corporate donations to political parties are often viewed as legitimate business expenses.[4] Corporations bringing jobs to politicians’ constituencies in return for legislative favors have created the corporate-congressional complex. The legal system has great difficulties in proving misbehavior: when networks of favors eventuate, the law is no longer able to trace the specific qui pro quo.[5]
  • When property is protected absolutely, the past is “grand-fathered:” past injustice is forgotten, white-washed, and perpetuated in the name of “precedent” and “consistency.”
  • Coevolution of law and corruption. Once passed, a law becomes a tool for “law-avoidance:” clever lawyers will find ways to skirt it. Implementing rules and jockeying with budget allocations can be used to gut the intent of the law. It is a slow yet relentless process of erosion.
  • Incompetence (and simply cowering to power) is the ultimate bastion of corruption: no bureaucrat has been punished simply for being stupid, or being taken for a ride. Staffing the administration with incompetent people is a sure way for partisan power to get its way. A variation on this theme is the current fad of contrasting the rule of law with the “overarching” quest for “efficiency.” The rule of law is painted as fetters (which is sometimes is) and cursorily applied.[6]
  • “Best practice” at its worst: not satisfied with prosecuting corruption, the current trend is toward preventing it. The trend is toward establishing “best practice” destined to stop straying from the path of virtue. Like cookbooks, such guidelines easily become unwieldy. By trying to cover all bases, best practices tend to impose documentation costs beyond the reasonable or appropriate to the context.[7] In addition, “best practice” may be regulation by stealth, and discretionary in verification, or easily encrusted with less than transparent “consultants.”

The flipside to the “rule of law” is the independence of the judiciary. It is viewed as the main defense against corruption. We may want to revisit this view:

  • Procedural fetters. Due process is a fundamental right. Intended to protect the weak (and the innocent), it often shields the perpetrator who, particularly in economic litigation like corruption, has the means to wage unending procedural battles, which tie up or overwhelm judicial resources. This can lead to justice delayed, or even denied.[8]
  • There is “safety in numbers:” when “everyone does it, no one does it.” Administering the “rule of law” presumes a high level of voluntary compliance. When corruption is systemic and chronic, repression becomes difficult and only long-term changes in mentality are likely to yield a turn-around.
  • From judicial autonomy to autocracy. The executive is one of the main targets of corruption probes. Independence of the judiciary is precondition for fearless prosecution of the executive. Though necessary, independence can lead to lack of accountability and in some cases to autocracy. Self-regulation is a weak management instrument, in particular when key posts are awarded by cooptation. Self-regulation does not establish priorities, leading to a “first come, first served” rather than strategic approach in fighting corruption. And the judiciary is not above being partisan itself.[9]

Autonomy coupled with delays and budgetary restrictions can lead to judicial fragmentation when the higher courts no longer ensure convergence of jurisprudence. “Venue shopping” and alternatively jurisdictional fights may ensue.

A novel phenomenon is “court pro-activism.” In a procedure redolent on medieval appeals to the benevolence of the sovereign, citizens may address directly to the courts for redress, bypassing all political, legislative and administrative processes. This is done in the name of immediate implementation of constitutional rights, when these are denied by culpable delays or omissions.[10]

Arguing that corruption is akin to an iceberg is close to cliché. What can be observed, traced and prosecuted tends to be the personal violation of the anti-corruption rules. The other shades of political interaction between the public and the private sector fade into “favors” and even achieve legitimacy as being “pro-business.” Much of today’s cynicism about the political caste reflects the effective lack of accountability.

Just as precarious, it would seem to me, is the judicial side. Growing complexity of litigation, but also insistence on autonomy bordering on lack of accountability appears to overwhelm the judicial system and leave it rudderless, unable to focus coherently on the problem and to set priorities. Now clueless, now imperious – or imperious since clueless – the courts too are growing distant from the citizens’ concerns.

A different approach to corruption is found in China. China never had a tradition of an independent judiciary: the state acted both as prosecutor and judge. The Censorate, which was part of the imperial administration, monitored the conduct of officials and emperors alike. “Their purpose was to ensure that the constitution not be undermined or compromised,”[11] but their powers depended on whether the Emperor invested any serious authority in it. More fundamentally, it depended on the doctrine of moral reciprocity between superiors and inferiors that animated Confucian ethics. If this ethic went missing, the system became autocratic.

In such a vertical system of responsibility and accountability, the principal has great difficulties in verifying the behavior of his agents. Competing control/spy networks were employed, soon leading to terror.[12] In any case, the quality of the checks depended on the pro-active stance of the principal – the emperor. His attention often flagged. Rebellions leading to a loss of the “mandate of heaven” were all based on perception of justice denied.

The separation of the executive and the judiciary is currently being implemented at the local (and up to the provincial) level in China.[13] Corruption, however, is one of the CCP’s major political concerns, for its legitimacy, in absence of a democratic electoral system, critically depends on it. Corruption is viewed as both a violation of party rules as well as a crime. The Party investigation takes precedent. It is swift, and can involve not only the individual, but also his entourage.

The system is swift, and fearless: General Xu Caihou, former Deputy Chairman of the CCP’s Central Military Commission, and thus among the highest-ranking military men, was expelled from the Party for “taking money and property in exchange for promotions and other favors.” I interpret the term “promotions” to indicate that many lesser military men will suffer the consequences. Comments in the paper point to Xu being part of a losingParty faction.

360° inspection of both state firms and authorities are a pro-active way to address the problem. Up to 200’000 party members may have been cashiered in the current anti-corruption drive. “The ferocity of the crackdown under the current government has been unprecedented in recent times. Although supported by most Chinese, the campaign has its doubters nonetheless. Some say cleaning up government is good, but only up to a point, or we risk damaging the image of the Communist Party and government. Some others voice fears that a sustained crackdown will hurt economic development.”[14] China’s system is opaque, which does not mean that it is ineffective. What we perceive is the clear political will to get a handle on the problem, rather than waiting for the culpable behavior to become patent. Such relentless battle is unheard of in the West – and not for lack of corruption. Regrettably, it is hardly acknowledged.

A world without corruption is utopia. Best efforts and “good enough measures” is what one can hope for. In the West the “legalist” approach has been taken, which focuses on transparence. China’s way is more akin to the “Confucian” approach, emphasizing an inner attitude. The CCP verifies this “attitude” by inspections and anti-corruption drives (albeit often ruthless and callous). Neither approach is perfect, of course: a categorical discussion on the superiority of either method is futile.

In fact, I’d opine, it is counterproductive. Corruption is an attack of the individual(s) against the community. It is a form of parasitism. Only a combination of “rule of law” at the micro-level combined with the political will to grasp the problem at the macro-level leads to sustainable progress. The imminent danger is the creation of self-referential and self-serving oligarchies. Neither system is immune to it,[15] nor will a less than holistic approach deal with the problem.

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[1]           It has been estimated that special interest legislation in favor of the corporate sector in the US amounts to about 500 billion $. Corruption can be absconded deep out of sight in the political system: my favorite, but not the only, example is the pervasiveness of gerrymandering in the US. Another would be FPP democracy in India, guaranteed to deny minorities a voice in Parliament. The US Supreme Court doctrine that money in politics deserves the protections accorded speech would be another example.

[2]           In India, Memorandums of Understanding between mining firms and the State Governments are not in the public domain. See e.g. Arundhati ROY (2013): Broken republic. Penguin, New Delhi. It is remarkable that transparency applies to state-to-state agreements, but not to state-to-firm transactions.

[3]           The most flagrant situation is the outsourcing of many non-combatant tasks of sovereign military activities to the private sector. Given the fog of war, oversight is often impossible.

[4]               India’s current PM Modi rode to political legitimacy on the TATA Nano, which is produced in his home state of Gujarat, and industrialist Birla has donated the most funds to Modi’s BJP – are these just exchanges of favors?

[5]           See e.g.: Duccio TRONCI (2013): Chi comanda Firenze. La metamorfosi dei potrei e i suoi retroscena attraverso la figura di Matteo Renzi. LIT, Roma (2nd ed.).

[6]           Italy’s Silvio Berlusconi turned “emergency measures” into an art of circumventing corruption probes. Most public works were declared “emergency measures” and freed of the usual anti-corruption procedures.

[7]           Road traffic would quickly come to a standstill if we all needed to document out safe driving, rather than face punishment when we don’t…

[8]           In India, e.g. in 2006 there was a backlog of 27 million judicial cases, or 300 years’ worth of litigation – Edward LUCE (2011): In spite of the gods. The strange rise of modern India. Abacus, London, pg. 94. In the US, the right to a speedy trial leads to over 90% of cases settled out of court – a form of “justice at a discount.” Few if any corporations have received criminal convictions, though some have paid hefty fines while denying wrong-doing.

[9]           Silvio Berlusconi, Italy’s “Great Corruptor,” has often complained that the “left-nacked” coop-system of the country is just as corrupt as he is – yet on the whole these structures have escaped prosecution. See e.g. Duccio TRONCI (2013): Chi comanda Firenze. La metamorfosi dei potrei e i suoi retroscena attraverso la figura di Matteo Renzi. LIT, Roma (2nd ed.); also Sergio RIZZO – Gian Antonio STELLA (2007): La casta. Così i politici italiani sono diventati intoccabili. Rizzoli, Milano.

[10]          In India, the Supreme Court will directly hear “Public Interest Litigation” and often decide weighty matters on the spot. Thus its Chief Justice in 2002 ordered India-wide linking of its rivers within 15 years (he qualified is belatedly as a “suggestion”). Without entering into the wisdom of building a system of big dams in the country, the autocratic way the matter was decided without any proper hearing leads to question the wisdom of such a “fast track” approach. See: Arundhati ROY (2006): An ordinary person’s guide to empire. Penguin, New Delhi; pg. 199-200. It does not help that “contempt of court” rules shields the SCJ from accountability.

[11]          Timothy BROOK (2010): The troubled empire. China in the Yuan and Ming dynasties. Belknap, Harvard University Press, Cambridge Mass.; pg. 81.

[12]          For anecdotic details, see: WU Han (1991): Le tyran de Nankin. Empereur des Ming. Philippe Picquier, Arles.

[13]             Experimentation is foregrounded. This has led to criticism of “opaqueness.” This need not be so. With complex reforms, it may be better to experiment before wholesale planning.

[14]          Curbing Corruption Requires More than Just Politics. Caixin Online 6.25.2014 18:46 http://english.caixin.com/2014-06-25/100695468.html See also: http://english.caixin.com/2014-07-01/100698222.html for an inventory of “bagged tigers.”

[15]             See e.g. Luciano CANFORA – Gustavo ZAGREBELSKY (2014): La maschera democratica dell’oligarchia. Laterza, Bari.

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