Citizens' views of the State and the social contract in Latin America and the Caribbean have deteriorated in recent years, especially during the pandemic and the governance challenges that it has brought. As a result, most perception surveys highlight the need for greater responsibility in the management of public resources. In addition, there is a broad consensus that corruption needs to be reduced to enable an effective and sustainable recovery.
Corruption is a primary concern for the citizens of the region. When asked about the main problems that affect countries, corruption systematically comes up as one of them. Therefore, it should not be surprising that the combined effect of perceived corruption and economic performance “explain about 80% of the variation in satisfaction with the functioning of the political system among the countries of the region”
Corruption is a systemic phenomenon. It is at the same time a failure of governance and development. And to tackle it rigorously, we need to understand how the rule of law works and how incentives in enforcing rules and procedures can be changed.
The corruption formula
In a recent training session for senior public management officials in Ecuador, we invited renowned professor Robert Klitgaard who argues that corruption can be translated into the following formula: corruption = monopoly + discretion – transparency. And that it is possible to think of it as a game of probabilities where the risk of being discovered in the act of corruption is evaluated against the personal benefit that could be obtained with the illegal act. For this reason, Klitgaard points out that corruption is a crime of calculation and not of passion. All this, we add, must be understood within the framework of a permissive culture, which in our region tends to manifest itself transversally in public administration and society.
The fight against corruption, therefore, must be approached from the understanding that corruption is systemic and not a simple transactional act between two individuals. To do this, it is necessary to subvert the arithmetical signs of professor Klitgaard's equation, emphasizing attention to horizontal internal controls and a more functional approach to accountability. To change these signs, it is necessary to carefully regulate monopolies, limit the discretion of the civil service, and increase transparency. In addition, the probability of being caught committing a corrupt act must increase, which is achieved through horizontal control and the reduction of the permissive culture.
The scheme of this subversion in the formula can be pictured as follows:
The information chain
We want to highlight some aspects of transparency, as the third component of the corruption equation. Transparency must also be understood in a systemic way because, as an isolated effort, it is insufficient, since we run the risk of concentrating solely on the availability of information. The information must not only be available, but also needs to be publicized so that it is easily accessible and must respond to accountability criteria so that it is actionable. In other words, the information that is accessed should potentially serve to achieve an effective impact on public anti-corruption policies and on the specific services that citizens consume.
At UNDP, we refer to this process as the public information chain. Unlike transparency, which focuses on the mere availability of information, the information chain is broader and is aimed at achieving an increase in the effectiveness of public management. Hence, together with transparency, publicity and accountability are key conditions for implementing more effective anti-corruption initiatives.
In that line of ideas, UNDP works with a preventive approach against corruption. For example, in Ecuador, in addition to providing training for public servants, support is also provided in three fundamental areas related to public procurement: the review of the regulatory framework; the creation of a compliance program; and the review of public procurement processes in key sectors to simplify processes and reduce the risk of corruption.
To sum up, one way to address corruption is changing the arithmetic signs of its equation, weaving a chain of information and generating incentives for positive change. It is not a matter that can be relegated. Corruption undermines human development, increases inequality, and hinders development, so combating it is central to advancing the goals of the 2030 Agenda.