This text of this chapter is from the publication Governance Innovations: Lessons from Experience, Building Government-Citizen-Business Partnerships. It is reprinted with the written permission of the publisher, the Institute On Governance (IOG). For information on this book, contact the IOG at 613 562-0090.

• What is Corruption?
• How Serious is the Problem of Corruption?
• The Role of Partnerships in Addressing Corruption
• Thailand - University Research
• Hong Kong Independent Commission Against Corruption
• Malaysia - Anti-Corruption Agency
• La Paz - Corruption at the Local Level
• Approaches That Work
• Vulnerability Assessments
• The Partnership Model
• Conclusion
• Bibliography
• Endnotes

Corruption is not primarily a problem of bad people but of bad systems. And these systems can be fixed. A critical element in combatting corruption is to address underlying incentives. This chapter focuses primarily on how partnerships or coalitions among state, society and the private sector can help to control corruption.' It presents case studies from four different jurisdictions - Hong Kong, Bolivia, Thailand and Malaysia - to illustrate strategies for combatting corruption, highlighting the benefits, pitfalls and obstacles encountered.

What is Corruption?

Corruption is the misuse of office for personal gain. The term covers a range of activities from the mundane to the exotic, including species of bribery, extortion, influence peddling, nepotism, kickbacks, speed money, collusion and more. Corruption is a sin not only of government but of the private sector as well; indeed, most public sector corruption includes the private sector.

The case studies show a wide range of kinds of corruption. In Hong Kong, the problems included "syndicated"² police corruption, bribes of officials in those government departments most in contact with the public and the extensive use of secret commissions (bribes) in the private sector. In Bolivia, the procurement process for city goods and services was rife with collusion and kickbacks, bribery was the norm before permits and licences was rife with collusion and kickbacks, bribery was the norm before permits and licences could be issued, and property taxes were being misappropriated. In Thailand, kickbacks, commissions and money politics (individuals buying their way into political office or financing politicians) are rampant. In Malaysia, there is considerable potential for increased bribery of public officials by the private sector in the many large, government-financed infrastructure projects now under way.

Some say that the concept of corruption is value laden and culture bound, smacking of neo-imperialism. Superficially, this might have some truth, but not where the basics are concerned. Bribery is illegal in all countries. People everywhere know the difference between a bribe and a gift. No religion endorses bribery. Indeed, the case studies and papers which form the back-round for this chapter address at least four separate cultural and religious traditions - Islamic Malaysia, Catholic Bolivia, Buddhist Thailand and the combination of Taoist, Christian and Buddhist influences in Hong Kong.

How Serious is the Problem of Corruption?

While it is true that corruption is everywhere, it is not everywhere equally serious. It is important to distinguish among types and degrees. Consider the analogy of disease: the Chairman of the Chinese Communist Party called corruption a disease; the Prime Minister of Malaysia called it a cancer. Every country has diseases, and diseases have been present throughout history. But the type and extent of diseases vary across countries and over time. So, too, for corruption which must be addressed just as public health does. It is inconceivable that someone would say "Disease is in every country and it has always existed; therefore, we should do away with public health programs." Yet people do suggest that some types of corruption be left to take their toll.

Some forms of corruption are relatively mild, like a cold, but others affect the very fabric of a society (as does a disease such as AIDS). Systemic corruption of the police is more serious than bribery in the issuing of driving licences. Widespread corruption which distorts the rules of the game relating to property rights, financial and banking systems, and justice can cripple development. This kind of systemic corruption can dramatically reduce growth and increase income disparities as is the case in several states in Africa and the former Soviet Union.

The Role of Partnerships in Addressing Corruption

Partnership may be defined as "a shared commitment to tackle development problems on the basis of an agreed division of tasks and responsibilities. Partnerships usually form around common goals, with the partners undertaking one or more activities toward that goal, either jointly or in tandem. Partnerships can be either temporary or of longer duration depending on the goal to be achieved.

There is a long tradition in Asia of forming common fronts and partnerships to achieve mutually shared goals. This tradition of partnership has been manifest in a wide variety of consultative committees at all stages of policy making and implementation in the Hong Kong civil service, in government and private sector co-operation as a foundation for outstanding economic growth in countries such as Korea, and more recently, in links between NGOs and the media in Thailand as a means of strengthening their advocacy role.

Much of the literature stresses the goal of equality in partnerships as a means of increasing their effectiveness. But when participants differ greatly in power and resources, such as in a coalition between government and civil society associations, equal partnership is an elusive goal. More frequently, these relationships are simply working alliances with a degree of reciprocity.

In whatever form partnerships occur, they are all means of building social capital which Fowler⁴ defines as the trusted reciprocal relationships between citizens and their associations at all levels of politics and economy. Social capital is increasingly being recognized as critical to the social fabric underpinning economic and social growth. Without the trust social capital implies, many aspects of society do not work, from community organizations to systems of credit.

Although there are many different kinds of partnerships, most involve some degree of power sharing and mutual accountability. The trust and mutual respect required for such elements take time to establish. Relationships may progress along a continuum over time where the level of co-operation with stakeholders increases en route to what might be termed a full partnership with shared power and responsibility.

Considerable thought has been given to what the ideal partnership or "development alliance" would include. Thus, Kamal Malhotra in his 1996 paper for the International Development Research Centre suggests some minimal ingredients for effective partnerships between Northern and Southern NGOs:

• a common vision and set of objectives;

• adequate time to build a relationship which then extends over a long period of time;

• mutual transparency and accountability;

• willingness and ability on the part of both sides in the relationship to be constructively

• critical of each other, within an overall framework of support and solidarity; and

• organization-to-organization relationships and exposure rather than relationships dependent merely on rapport between individuals.

This chapter examines the relevance of these factors to relationships between sometimes powerful government authorities trying to control corruption and their often (but not necessarily) weaker partners in civil society and the private sector.

It should be noted that, in most of the cases reviewed here, there is no explicit partnership agreement per se but more often a situation where both sides recognize potential benefits from a relationship and are prepared to work together to achieve them. Working together involves a range of activities from the most limited forms of participation such as surveying stakeholders (see the Thai case) to long-standing and formalized relationships such as in Hong Kong. In the conclusion, we look at the extent to which these activities also represent a continuum.

Thailand - University Research

The Faculty of Economics at Chulalongkorn University in Bangkok is undertaking extensive research on corruption including documenting its historical roots, assessing the levels of corruption and reviewing the legal framework.

The university has used focus groups and questionnaires to assess people's definition of corruption, their attitudes toward it and their opinions about reform. Although the public is generally very concerned about corruption, this concern varies significantly depending on the type of activity. For example, commissions to military officers on arms purchases were considered by most of the 2,243 people questioned in one survey as corruption, but only seven percent considered nepotism - for instance, promoting someone because he or she is a relative - as a corrupt practice.

The media gave broad coverage to the results of the university's research including estimates of benefits to civil servants (based on interviews with members of Parliament) of at least four percent of the total government budget. The incensed public protested against corruption and called for greater accountability on the part of politicians and public servants. The media have also given much attention to a more recent university study on illegal activities, resulting in public demands for greater accountability from the police.

Corruption is now in the forefront of political debate in Thailand.

Hong Kong Independent Commission Against Corruption

In the 1960s and 1970s, corruption in Hong Kong was widespread, highly organized and deeply rooted. Although the police themselves were engaged in abetting (for a price) prostitution, gambling and drug dealing as well as in "fixing" traffic violations, the force had also always been responsible for fighting corruption and guarded that role vigorously. The chief of police had long argued effectively that removing the responsibility for corruption from the mandate of the police would undermine their credibility. But public disaffection was high and came to a boiling point in 1973 after the mysterious disappearance of a senior European police officer under investigation for corruption. The resulting commission of inquiry stopped short of recommending that anti-corruption activities be taken out of the hands of the police but it did list comprehensively the advantages and disadvantages of doing so.

Legislation passed in 1974 subsequent to the inquiry provided for the establishment of one body to address corruption, the Independent Commission against Corruption (ICAC) of Hong Kong answerable to the Governor. The legislation spelled out a three-pronged strategy against corruption: investigate, prevent, and educate and enlist support. The objectives defined were, and remain, to raise the risk of being caught, to restructure government systems to reduce the opportunities for corruption and to change people's attitudes about it.

The ICAC has established five advisory committees to help define operational strategies and institutionalize its activities. These committees include one for policy, three for specific functions -prevention, operations review and community relations which correspond to departments within the ICAC -and one to deal with complaints against the ICAC and its officers. Their members include senior members of Hong Kong's legislature, representatives of the commercial, trading and social service sectors, as well as grassroots representatives. The chief of police and his representatives sit on two of the committees. The committees meet regularly (one meets monthly) for half a day to review reports on their respective areas and provide community and expert advice on priorities for action. The contribution of volunteer time is significant, and members obviously expect that their views will have an impact on the decisions taken by the ICAC. Although the ICAC is not obliged by law to accept the advice of any committee, it usually does.⁵ Today, the ICAC is widely seen as one of the most effective anti-corruption agencies in the world.

Malaysia - Anti-Corruption Agency

Malaysia's fight against corruption dates back to 1959 with the establishment of two bodies to deal with crime and corruption. In 1967, they were amalgamated into a new department called the Anti-Corruption Agency (ACA). This agency went through several metamorphoses, to find itself in the 1980s under the Prime Minister's department for administrative, manpower and budget purposes but headed by a director-general appointed by the King. It remains there today.

The original strategy of the Malaysian ACA was to focus on the private sector, but this emphasis changed over the years, partly as a result of citizen feedback suggesting that corruption in the public sector was of greater concern. Since the late 1980s, prevention measures to combat corruption have intensified, with emphasis on public education and the inculcation of good moral values among members of the public and public servants. Departments which are the object of many complaints are designated as "critical" for immediate anti-corruption campaigns. In the future, the ACA expects to concentrate on setting up Ethics, Quality and Productivity committees in all government departments as well as in corporations, on addressing corruption in the private sector, on developing more effective laws of confiscation and seizure, and on mobilizing the media.

La Paz - Corruption at the Local Level

When Ronald MacLean-Abaroa first became mayor of La Paz, Bolivia in 1985, he found a city in disarray. La Paz was on the verge of financial collapse with the monthly city payroll exceeding revenues by 20 percent. At the same time, the top salary was only $100 per month. Corruption was rampant - in the police, in public works, in procurement and in the issuance of licences and permits.

One of his first acts was to work with municipal officials in workshops and other sessions to help pinpoint corrupt practices. The diagnosis went through several steps. First was a case study of a successful anti-corruption campaign in another country which they could analyze coolly and without personal involvement. The second was the use of analytical frameworks to help participants address corruption. The final step was self-diagnosis and self-prescription.

MacLean-Abaroa made incredible progress in addressing the problems of La Paz. Over the course of his five years in office, he reduced corruption, increased investments, enlisted the support of foreign donors to increase the salaries of employees, redefined the role of the city government and laid off surplus workers, thereby reducing the work force by 40 percent. Revenues increased by a factor of 10.

Unfortunately, MacLean-Abaroa's successors were less enlightened than he. They distorted basically sound policies and procedures for their own ends and by, 1995, corruption had resumed to levels approaching those of the pre-1985 period. Although MacLean-Abaroa had skilfully blended his activities in La Paz with the national government's policies of liberalization and had worked with the President (even though they represented opposing parties), the national government did not intervene when the two mayors who succeeded MacLean-Abaroa dismantled some anti-corruption systems, misused others and undermined effective administration via nepotism and political appointments. The system of checks and balances through civic organizations was also weak. Some of the organizations enlisted to help implement reforms were not fulfilling their roles. For example, the members of the College of Architects, the private sector organization given the responsibility for granting building permits, were eager to collect the fees for permits but not eager to apply sanctions against corrupt inspectors.

MacLean-Abaroa was re-elected mayor in 1996 and started the reform process anew. With the backing of a new law on public participation, he turned the responsibility for identifying the priorities for municipal works over to neighbourhood associations. He also encouraged newly established vigilance committees to oversee general city activities as well as the various public works projects. His work was thwarted when a group of city councillors used a new legal provision for review of the mayor's term in office after one year to oust him from office. The review process was carried out secretly, without public participation and in great haste (the vote took four minutes). The elected mayor was replaced by one of the councillors who could be subject to the same non-transparent and discretionary procedure after another year in office.

Approaches That Work

The literature on successful approaches in other cases of corruption control often divides the battle into three stages: diagnosis, development of appropriate strategies and implementation. The following section analyzes the four cases cited above in relation to each of these stages, paying particular attention to new insights on how the range of activities leading up to and including full partnerships has facilitated the control of corruption. The focus is on practical approaches to designing and implementing anti-corruption policies.

1. Diagnosis

The first step in addressing corruption is to understand the nature of the problem and to define its levels and extent, recognizing that the diagnosis of corruption that applies today may not apply tomorrow as the disease mutates and takes on different forms. The initial diagnosis must be monitored regularly. This enables treatment to keep up with changes in the course of the disease.

Robert Klitgaard, Ronald MacLean-Abaroa and H. Lindsey Parris⁶ suggest three methods of diagnosis:

• workshops with those involved in corrupt systems;

• systematic anonymous surveys of employees and clients; and

• special studies including vulnerability assessments.

In La Paz, the mayor was able through workshops to draw on the knowledge and expertise of civic employees to identify systemic problems, even where their intimate familiarity of practices was incriminating. (This points out the schizophrenic nature of corruption - although people may engage in it, they also suffer moral qualms.) The organizing principle of the workshops was a therapeutic approach to a sick institution whereby corruption is demystified.⁸ Participants were encouraged to analyze problems in a cool and dispassionate manner. A similar moral conscience may have been tapped when the Thai university researchers surveyed parliamentarians about corruption, although many of these politicians are far from honest themselves.

The anti-corruption agencies in both Hong Kong and Malaysia use a number of methods to seek input from clients. The ACA encourages the public to report crimes by distributing printed materials such as calendars, executive planners and stationery with anti-corruption messages and telephone numbers to contact the ACA. The Agency also distributes aerograms for people to use to inform the ACA. In both Malaysia and Hong Kong, citizens can report on corrupt practices through 24-hour-a-day hot lines. (In Hong Kong, citizens use these lines to express their views on a wide range of issues.) Information coming in through these channels reflects the issues the populace sees as most critical and helps to define the priorities of the agencies. The ICAC also does an annual survey of the public's perception of its activities. Repeated consultations with the public coupled with government implementation of suggestions has created the trust essential for long-lasting government/public coalition against corruption. The ACA helps other government departments and the corporate sector to establish Ethics, Quality and Productivity committees which act as internal watchdogs to monitor government employees for corrupt activities.

Several of the cases reviewed used special studies to identify corrupt practices. In Hong Kong, for example, the ICAC works with other government ministries to carry out vulnerability assessments of their activities and implement the recommendations coming out of them. See the box below for an example of a vulnerability assessment.

2. Development of Appropriate Strategies

After assessing the kinds and extent of corruption as well as the actors involved, the next task is to define an appropriate strategy or treatment. Corruption is a crime of calculation, not passion, when an individual makes calculated decisions about projected costs of, and benefits from, potential activities. People tend to engage in corruption when the risks are low, the penalties mild and the rewards great. Corruption is most common when someone has monopoly power over goods or a service, has the discretion to decide who receives how much of it, and is not accountable for the decisions. Thus corruption equals monopoly plus discretion minus accountability (C = M + D - A).

Klitgaard et al. suggest five broad policy measures to be included in a strategy to address corruption:

• selecting employees;

• setting rewards and penalties;

• obtaining information about results and linking rewards and penalties to them;

• restructuring the relationships among organizations, their employees and their clients to reduce monopoly power, circumscribe discretion and enhance accountability; and

• raising the "moral costs" of corruption.

Corrupt situations have winners and losers. As well, there is a kind of interdependency. If bribe payers see themselves as losing as a result of corruption, they are potential partners in a fight against dishonesty. On the other hand, if bribery makes both the payer and the recipient better off than they would be in an honest world, they are unlikely partners in the fight against corruption, and outside controls may be the only solution. This interdependency was important in some of the cases studies. In Hong Kong, for example, staff selected to work in the ICAC are highly qualified and well paid (marginally more than the civil service salary scale). They are thoroughly screened before being hired and monitored once on the job. In addition, the Commissioner has the right to dismiss summarily any one whose integrity is in question. The partnership is quite explicit: management treats employees well if they abide by a defined code of conduct.

Setting up communication channels with various groups has been important in collecting information about efforts and results. The hot lines, surveys and vulnerability studies mentioned earlier all served this purpose. In Hong Kong, the diverse membership of the five advisory committees provides information on attitudes among the general public as well as business and professional associations.

All the cases studied recognized the importance of restructuring systems to reduce monopoly and discretion and increase accountability. The partners involved in developing strategies to reverse these factors, however, varied tremendously. In La Paz, the mayor worked with his municipal employees to develop three approaches for addressing monopoly power: the assignment of revenue collection to banks and away from city officials, the redefinition of the role of the city in construction from undertaking major projects to carrying out only emergency repairs and supervising new works, and increasing competition in bidding. The employees working with the mayor also suggested reducing discretion through increasing the transparency of services, primarily through producing and posting in government offices one-page explanations of all processes undertaken.

In Malaysia, the ACA works with the various Ethics, Quality and Productivity committees to identify procedural loopholes that could be abused by staff. In addition, the ACA works with the Manpower Administration and Planning Unit, a separate agency, to look into systemic and procedural weaknesses that may provide opportunities for corruption in government and private sector organizations. In Hong Kong, the ICAC and client departments work together to do methodical examinations of all government systems on a periodic basis. Addressing systemic loopholes does not mean creating more rules and regulations. In fact, adding layers of oversight and rules may be counterproductive and create the opportunity for more corruption and for more inefficiencies. Many failed anti-corruption activities have taken a rules-oriented approach, as for example, in New York City.

The two anti-corruption agencies -ICAC and ACA - actively seek public support for their anti-corruption activities through raising the "moral costs" of corruption. They sponsor television ads which emphasize the costs to an individual's reputation and to his or her family of being accused and convicted of corrupt activities. The ACA uses the Ethics, Quality and Productivity committees mentioned above to promote high moral values and good work ethics among civil servants. Desirable behaviour is further reinforced by an employeerating system which allots 10 percent of total points to the honesty and integrity of the individual.

3. Implementation

The final step in the battle to control corruption is to develop an implementation strategy and carry through with it. Klitgaard⁹ suggests several steps in an order that is probably appropriate to most situations:

• organize the government's efforts: co-ordination and a focal point;

• "pick low hanging fruit": choose a problem that is relatively easy to fix first;

• align with favourable forces (national, international, private sector, NGO);

• break the culture of impunity by "frying big fish";

• raise the profile of the anti-corruption effort through publicity;

• do something good for government officials before seeming to attack them;

• strengthen institutional capacity not only through "supply-side measures" (more training, more experts, more computers) but especially through changing systems of information and incentives; and consider how an anti-corruption campaign can galvanize broader and deeper changes

• in government (such as client consultation, pay-for-performance, privatization with high-quality regulation).

The most successful anti-corruption efforts among our case studies were those of the ICAC, an organization with a clear mandate and the necessary support and resources to carry it out. Commitment at the highest levels is critical to this. Such commitment has existed in Hong Kong since the 1970s and has undoubtedly contributed to the ICAC's success.

Besides having a well-defined role, the ICAC has successfully built coalitions with a variety of favourable forces. Its strong resource base, for example, reflects its close working relationships with the administration and with legislators, particularly those serving on budget committees: about $US 70 million compared to ACA funding of about $17 million. It also has the judiciary as an independent and fair-minded ally. Unless judges uphold the laws against corruption, the guilty may escape unpunished. This happened in Thailand when the presiding judge acquitted a case that the attorney general had pursued in defiance of the police. To avoid such possibilities, judges in Hong Kong are given the opportunity of attending familiarization briefings on anti-corruption activities.

In addition, the ICAC works with jurists and legal professionals to lobby for the necessary powers to carry out its mandate (including the right of access to bank and tax records, the right to tap telephone lines and the right to lay criminal charges against civil servants with unexplained wealth) with adequate penalties for those convicted. This is in contrast to Malaysia where penalties are often so light that they may not provide adequate deterrents. (About 85 percent of those convicted receive prison terms of less than six months, and half receive only one day's sentence.) But legislation must also provide for a fair and transparent process, which has not been the case in La Paz. There, the electoral process has been replaced by an oligarchy with ultimate discretion and little, if any, accountability.

In Hong Kong, the leading chambers of commerce have joined with the ICAC in a campaign to promote business ethics, a co-operative effort that has taken several years to develop. Previously, the private sector, and particularly the Chinese business community, opposed what was seen as unwarranted interference by the Commission into their activities, making fun of the initials ICAC as standing for "Interference with Chinese Ancient Customs". As of 1988, however, 50 percent of the complaints received by the Commission involved corruption in the private sector. Business people also began to appreciate that corruption was eating into their profits. In return for support, the ICAC provides the private sector with free confidential advice on dealing with corruption problems and includes representatives of the business sector on some of its advisory committees.

Finally, the ICAC works hard to maintain the support of the public. It gives priority in its operations to issues which citizens have identified through the hot lines as important and has greatly increased its openness to public scrutiny over the last few years, through such activities as the 1995 participation of the Commissioner in an open forum.¹⁰ The pay-off is 98 percent support for the Commission's work in annual public surveys.

Maintaining public support is partially dependent on ensuring visible short-term successes or "picking low hanging fruit." This can be achieved through taking on some relatively easy tasks such as simplifying systems that affect large numbers of the public, as was done in La Paz where the number of steps in the licensing system was reduced and fees waived.

Yet another factor in maintaining public support is catching some high-profile, corrupt individuals ("frying big fish"). This helps to break the culture of invulnerability to prosecution characteristic of many societies where corruption is rife. In Hong Kong, shortly after its establishment, the ICAC extradited the former superintendent of police (whose escape to England had incited student demonstrations) to stand trial on corruption charges. He was subsequently convicted and sentenced to imprisonment. Over a three-year period, a further 260 police officers were arrested on corruption charges. In the 1990s, the ICAC has prosecuted several leading members of the community including the chairman of the stock exchange for accepting bribes, the deputy director of public prosecutions for selling prosecution cases and a legislative councillor for bribing electoral voters.

The Malaysian agency has investigated ministers, charged a footballer with rigging a match and had bank managers convicted for taking a personal percentage for approving bank loans.¹¹ In La Paz, the biggest fish was the city cashier who owned several expensive cars and offered loans to other municipal officials at "competitive" rates.

The case studies show how the media can play a critical role in the battle against corruption. The ICAC in Hong Kong has long provided information to the media while the media cover issues of interest to the Commission. More recently, the ICAC has also worked with a television company to produce a popular prime-time serial documentary drama on fighting corruption. In Malaysia, ACA officials participate in talk shows on radio and television, and the Agency has produced several television dramas in co-operation with Radio Television Malaysia. These dramas have been aired frequently and are well received by the public.

Since corruption thrives on ignorance, another mechanism for raising the profile of anti-corruption efforts is the use of education and information campaigns to encourage higher ethical standards among citizens. It is through such programs that both the ICAC and the ACA try to narrow the gap between the perceptions of the public and the definition of corruption embodied in the law and thus encourage the public to support anti-corruption efforts. In Hong Kong, ICAC officials give public speeches and teach courses in schools, at the university and to the police. Programs are targeted at different segments of the population including teachers, students and lawyers. In Malaysia, ACA officials work with the communication officers of other government departments to mount education campaigns. The Agency has also convinced the National Administrative Training Institute to include courses on corruption in its curriculum for government officials. Finally, the ACA runs ethics campaigns in schools.

A society may not consider certain activities corrupt if there are strong historical or even economic conditions supporting the behaviour. In countries where the social support network is virtually non-existent, it may be accepted practice for public officials to profit from office in order to provide for themselves and their extended families. Efforts to control corruption in these societies must include programs to change values and perceptions. Fortunately, there is ample evidence that perceptions and values are not static and can change over time, as they did within the private sector in Hong Kong.

Building a civic culture which values accountability and transparency in government requires approaches geared to the cultural milieu of the country and which take into account the history of governance. In our case studies, the different countries developed education and information campaigns based on their cultural and religious values: an emphasis on Islamic values in Malaysia, on winning the hearts and minds of the public in Hong Kong and on Buddhist values in Thailand. The lack of civic education in La Paz may have contributed to the low demand for accountability and the consequent non-sustainability of MacLean-Abaroa's reforms, although it must also be recognized that it takes many years to build this kind of civic culture. (MacLean-Abaroa was the first democratically elected mayor of the city; his predecessors had been appointed.)

On the other hand, it is difficult to determine the causality between education on ethics and controlling corruption. Further research, perhaps in the form of public surveys, would be required to determine to what extent the success of anti-corruption efforts in Hong Kong and Malaysia has been a function of the systemic changes implemented to reduce financial loss as opposed to moral education programs.

Not only is it important to ensure that the public supports the controlling of corruption, it is also important to gain the support of staff. In La Paz, the mayor did this by raising salaries, bringing them up to private sector levels within three years of taking office. He also ensured that training opportunities were dramatically increased.

Incentives such as these must be institutionalized to ensure they last. Thus, in La Paz, a new Institute for Municipal Training was established. To help keep employees honest, a new auditing system was designed, though unfortunately never fully implemented. In Hong Kong, there is an extensive system of auditors and specialized investigative staff.

Wei¹² points out that the degree of corruption in a country tends to correlate to other dimensions of government quality, such as the extent of bureaucracy and red tape, or the quality of the legal system. The La Paz case study illustrates how an anti-corruption campaign can have much broader consequences and can help to improve general government effectiveness. In addressing corruption, MacLean-Abaroa improved service to the public, increased equity (through fairer tax systems) and encouraged the merit principle in staffing. In both Malaysia and Hong Kong, anti-corruption efforts are often combined with system improvements which lighten bureaucracy and increase its effectiveness. In Hong Kong, the creation of advisory committees has helped to strengthen democratic traditions by involving citizens in the process of governance. It also represents a movement toward greater transparency in decision making.

The Partnership Model

How do these case studies measure up against the criteria for successful partnerships outlined at the beginning of this chapter?

• Common vision and set of objectives: The anti-corruption efforts covered by our cases seem to benefit from explicit partnerships where visions and objectives are clearly spelt out and agreed, as the ICAC and its advisory committees have done. The methods of work of these committees are clear, and they are not random, one-shot affairs. Responsibilities are well defined. Making partnerships more explicit is also a factor in giving them legitimacy and making them more sustainable.

• Adequate time: The case studies reinforce the importance of the time necessary to build relationships. Anti-corruption activities are complex and require persistence and commitment. Time is required to develop awareness of civic rights and a demand for reforms among populations which have traditionally been ruled autocratically, as in Bolivia. Happily, persistent attention over time can bring around formerly reluctant partners, as with the private sector in Hong Kong which only came to support the ICAC well after its establishment.

• Mutual transparency and accountability: In our case studies, transparency is important to establishing the credibility of anti-corruption activities. The ICAC has done this most successfully by opening its activities to the inspection of community representatives through its advisory committees. At the same time, these committees help the ICAC to keep its finger on the pulse of the community, identify emerging issues and retain the support of the populace. Citizen feedback provides a broad range of views on problems and possible solutions and the risks associated with them. Regular, systematic consultation with representatives of the public also ensures a high degree of ownership on the part of the public.

• Willingness and ability to be constructively critical: Our case studies suggest that feedback between anti-corruption forces and their various constituencies helps to make their activities more effective. The ICAC has done this systematically through its annual surveys as well as the 1995 open forum between the Commission and the public. These consultations supply information to redirect resources to priority activities, such as when the ICAC refocused its education activities more on young people - as a result of its annual survey showing a slight rise in tolerance of corruption among this group.

• Organization-to-organization relationships and exposure: The most successful anti-corruption partnerships were those where pro-reform constituencies and coalitions had a long-standing formal structure and went beyond individual personal relationships. Examples of these are the ICAC advisory committees and the ACA ethics committees which are broader and more permanent than the isolated consultations of Mayor MacLean-Abaroa's first period in office. Even today, the vigilance committees in Bolivia are in their infancy and have not yet had sufficient experience to take on the well-organized forces of corruption. In Thailand, there is a also a shortage of formal organizations which can spur activities on the anti-corruption front.

In addition to the above points, our case studies suggest four other criteria for effective partnerships in the context of anti-corruption activities:

• Broad stakeholder participation: Involving as wide a gamut of stakeholders or interested parties as possible - both those likely to be supportive as well as those who could undermine the cause - helps to reinforce especially the accountability side of the equation, C = M + D - A, and promote a sense of ownership of and responsibility for actions. This sense of ownership is critical if reforms are to outlast one particular leader and can help protect systems from erosion when regimes change.
  Inadequate participation by the population as a whole may be a factor inhibiting greater buy-in from stakeholders. The private sector and the public in Malaysia have, for example, been consulted less than in Hong Kong on the identification of priority issues for action and in La Paz, the general public was not consulted during MacLean-Abaroa's first period in office. More input from these stakeholders might have ensured greater accountability and helped to strengthen the checks and balances necessary for sustainable reforms. The media can also help to mobilize public support and reduce the acceptability of corrupt activities in the eyes of the general public.

• Knowledge of the context: Anti-corruption activities should be based on a thorough understanding of the cultural norms of the country and what is accepted behaviour or not. This helps to identify where support can be mobilized. In countries where there is a high degree of public and political support for fighting corruption, the focus of efforts might be on the most critical problems and, within them, on the areas where the costs of corruption are high and of remedial action, low. This is the Hong Kong situation. Where political will is weak or ethics reform activities remain especially sensitive, the focus might be on smaller, less evocative issues in an effort to sensitize the society to corruption as a policy issue, build public interest and stimulate momentum in the reform process. Thailand probably falls into this category for the moment.

• Building checks and balances: It is important to build the capacities of the society to resist corruption by changing the systems that were more or less susceptible to various illicit activities. This often means involving the civil society in building institutional checks and balances over the. power and activities of authorities in both public and private domains. Sustainability also requires that systemic changes be institutionalized beyond one single anti-corruption agency or individual. Simply addressing the symptoms of the disease as manifested in the actions of individuals is inadequate. A real test of the effectiveness of institutionalization will be whether the ICAC with its strongly established systems is able to maintain its independence and professional practices over the next few years.

• Incentives: Appropriate incentives, both positive and negative, can encourage employees and the public to work with anti-corruption forces. Good behaviour deserves rewards through adequate salaries. Penalties need to be adequate to deter misbehaviour.

Conclusion

The case studies clearly illustrate the strength to be gained from bringing together different stakeholders into a common front and from mobilizing social energies. In addition, they suggest a correlation between the strength of partnerships and the anti-corruption activities they support. Where partnerships were strongest, the anti-corruption activities were the most effective. Hence, the ICAC depended on the support of its various stakeholders to control corruption in Hong Kong effectively.

Earlier in this chapter, it was suggested that partnerships might fall along a continuum from nascent to full. Indeed, the case studies reviewed illustrate different degrees of co-operation with stakeholders and might be characterized as follows:

• event-led coalition as in Thailand;

• leader-led coalition as in La Paz;

• co-operation and collaboration between government departments as in Malaysia; and

• institutionalized partnerships between government and civil society in Hong Kong.

Moving down the continuum, there is an increasing number of contacts between partners or potential partners, from one or two events in Thailand (the release of research results) to monthly meetings in Hong Kong. With an explosion of contacts, the relationships become increasingly explicit, probably with little discussion of the nature of the co-operation in the first two cases and considerable in the latter two. (The institutionalization of the ethics and advisory committees undoubtedly necessitated considerable debate about roles and responsibilities.) Similarly, the degree of sharing of power increases through the continuum, with Thailand demonstrating the least and Hong Kong, the most: the advisory committees have considerable influence over decisions made by the ICAC.

It would also appear that moving down the continuum requires increasing levels of political will. In Thailand, there is little such will and few if any activities against corruption. In La Paz, the mayor's considerable political will was not shared by other politicians and his reforms were short-lived the first time and may well be the second as well. In Hong Kong, the political will is presently strong and will remain so if China's publicly stated intentions are maintained. Malaysia would probably benefit from a higher degree of political support to ensure more adequate resources. Public pressure helps to create and maintain this will, as aptly demonstrated in Hong Kong. It may eventually do so in Thailand. Conversely, in La Paz, there did not appear to be any particular public demand once MacLean-Abaroa had left office the first time.

The countries higher on the continuum might find it useful to involve a greater range of stakeholders in the planning and implementation of anti-corruption activities. In Thailand, this might include the private sector, the judiciary and professional groups such as lawyers. In La Paz, professional groups, the media and neighbourhood associations affected by corrupt practices might be possible supporters. Legislators should also be targeted to ensure that the law on the review of mayors is changed to encourage responsible behaviour. In Malaysia, logical partners would appear to include civil society and the judiciary. Some of these stakeholders may require education and encouragement to develop their support.

The fact that the ICAC evolved from public dissatisfaction similar to that now being generated by the university's research in Thailand leaves hope for the future. Social capital increases when people successfully address issues together. Thus, the success in gaining public attention in Thailand is a good foundation for further action. It could conceivably lead to concrete activities against corruption. On the other hand, moving to a strong anti-corruption agency such as the ACA or the ICAC is a longer process because of the supporting legislation and institutional structure required. Maintaining the momentum is a challenge, as the La Paz case clearly demonstrates.

A final caveat. Partnerships which become too cosy can create a kind of corruption or, at least, a neglect of government functions such as regulation and the correction of market imperfections in favour of interest groups and at the expense of the public good. As Laffont and Tirole¹³ point out, supervisory decision making can be just the tip of the iceberg here, with the more important aspect being the rules and policies developed in the regulatory organization which have the potential for "capture" by or bias toward interest groups. The challenge is to maintain the positive aspects of partnership (oversight, more information about needs and possibilities, comparative advantage, etc.) and avoid collusion between government officials and interest groups.

Controlling corruption is a complex process requiring commitment over years. We cannot expect a simple solution. There is certainly no easy cure.

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Endnotes

^1. This article draws primarily on four case studies on corruption presented at the Conference on Government Innovations. It also brings in information from three other papers presented at that Conference. The case studies are: "Notes on the Hong Kong Independent Commission Against Corruption" by Bertrand de Speville; "Malaysia Anti-Corruption Agency" by Azni Hamzah; "Beating Corruption at the Local Level: The Case of La Paz, Bolivia" by Dr. Robert Klitgaard, and "Corruption: Research and Reaction (Thailand)" by Dr. Pasuk Phongpaichit. The three papers are: "A Strategic Approach for Donor-Assisted Counter Corruption Programs: Preliminary Thoughts for Discussion" by Dr. James R Klein; and "Combating Corruption" and "Corruption as Counter-Culture: Attitudes to Bribery in Local and Global Society" by Denis Osborne. (The latter paper was originally prepared for the Fourteenth International Symposium on Economic Crime and Corruption - the enemy within.)

^2. Corruption involving a group of officers who collude in collecting (often extorting) and distributing money.

^3. Bossuyt and Laporte (1994), p.1.

^4. Fowler (1996).

^5. Several factors enhance the influence of these committees: the chairs of the three functional committees are all members of the Policy Committee, every committee reports annually to the Governor of Hong Kong, and these reports are tabled in the legislature.

^6. Klitgaard, MacLean-Abaroa and Parris (1996).

^7. The analysis of information on procedures, control systems and supervision to identify areas where corruption might occur - thus a focus on prevention.

⁸. Klitgaard (1996).

^9. Klitgaard (March 1996).

^10. In the early days, the ICAC was seen as being very secretive.

^11. These examples come from personal communication with Denis Osborne, an advisor and consultant on Development and Governance, 122 Dulwich Village, London SE21 7AQ.

¹² Shang-Jin Wei (1997).

^13. Laffont and Tirole (1996).