Causes of Corruption in Public Sector Case Study

The reason for choosing this as a topic of research is to measure the impact of corruption on public. This paper would help the organizations in assisting with the eradication of such practices. The research is undertaken for having an insight to a wider range of disciplines and potential application of ethical practices. The research could serve prevention of corrupt practices in the public sector if the facilitators or enablers are addressed. There are different casual sequences and contextual factors that contribute to corruption. With the analysis of those factors, ethical practices can be framed, and public can increase their moral faith on public sector organizations. Development of knowledge can help in developing a preventive strategy for anti-corruption .

Research Questions/ Hypothesis

Every country is ranked on The Transparency International index that determines the level of corruption practiced by a particular country or economy. These rankings are based by several criterions such as embezzlement of public funds, bribery to public servants, the effectiveness of anti-corruption efforts and cuts in government procurement. The rank for every country reveals the lack of accountability from civil servants, an increase in practices and negative changes in the public sector .

The main research question for this piece of work is identified as-

1. What are the factors that cause corruption in the public sector?

With the identification of facilitators or enablers of public sector corruption, reform measures can be offered for reducing the rate of corruption in public sector. There is hope that these factors can help in resolving the high rates of corruptive practices for making the public sector more efficient and effective.

There are other subsidiary questions that are answered in the report-

1. What are the different forms of corruption in the public sector?
2. What are the effects of corruption in the public sector?
3. Why is there a need to take preventive measures against corruption in the public sector?

These subsidiary questions help in answering the impacts or ill-effects of corruption in public sector. These factors help would in inducing and materializing the urgency of anti-corruptive policies and procedures.

Hypothesis 1- There is a positive relationship between corruption and country risk in the market.

It is further assumed that there is a direct and positive relationship between corruption and country risk. Public sectors are meant to serve the public. The officials are public servants. Starting with a few corrupt practices, it forms a slippery slope where people fail to understand the difference between ethical and unethical practices. These practices slowly develop into a slowdown of economic, political and social structures. With every increase in corruption, the risk of country increases and vice versa .

Aims and Objectives of the Study

The main aims and objectives of this study are threefold stated as under-

• To explore the causes of corruption in the public sector.
• To address the issues or potential risks due to public sector corruption
• To offer a base for taking preventive measures for corruptive practices.

The paper helps in the synthesizing literature on corruption by assessing political, economic and social conditions. The study also helps in identifying evidence that corruption exists in financial, social and economic sectors. It is important to highlight the causes of corruption in the public sector because public services are vital to the growth of every country. The roles and responsibilities of every public official are critical as they make or ruin administration of the country. This survey represents a lack of accountability from officials that are not harshly penalized helping them in getting away easily.

Methodological Approach

This study is a literature review with systematic principles and reviews for a more flexible data analysis method. Data is collected from primary sources such as interviewing and questionnaires. The secondary sources are also used such as journals, newspaper articles, and other relevant academic sources. The data in these sources are collected from either internal or external sources. Quantitative data is collected for showing the increase in corruptive practices.

Limitations of the Study

For this paper, there were limitations of time and space. Since there was limited time, online surveys and reports have to be considered and not take the local people who are victims of corruption. While the report and studies have contributed to the understanding of corruptive practices and its causes, the biggest limitation lies in measuring corruption through perception indexes. The causal effects of corruptive practices are also difficult to identify that has a risk of biases. The report fails to focus on the forces over government officials that sometimes make them do so. The threats by any other person with a criminal background that has to be faced by government officials are ignored.

Definition of Terms

Corruption- It is a form of unethical or dishonest conduct by a person for acquiring personal benefit. The person is entrusted with his power or position that is taken undue advantage of, for personal gains. It is the use of legitimate powers for illegitimate private benefits (Doig and Theobald 2013).

Bureaucracy- An organization made of several divisions or departments administered by a lot of people is bureaucracy. The administrative body with non-elective officials who frame policies are members of the bureaucracy. The officials who compose the administration are known as bureaucrats (Adler 2012).

Literature Review

According to Jose Ugaz, Chairman of Transparency International, "Countries at the bottom need to adopt radical anti-corruption measures in favor of their people. Countries at the top of the index should make sure they don't export corrupt practices to underdeveloped countries" (Transparency.org, 2016).

In literature, there are distinctions made between causes of corruption relating to salaries, working conditions, and chances of corrupt practice occurrence. There are degrees of corruption such as highly corrupt or less corrupt official. Corruption is the misuse of public position or power for an undue advantage for self or others. There are several instances that contribute or form together as corruptive practices. A few examples or forms are fraud, bribery, embezzlement, and extortion, exchanging goods for information or money, perverting the court of justice and trading in influence. These corrupt conducts can occur through unlawful actions of officials in the public sector for attempting inappropriate functions of the government sector. Certain crime groups seek help or support from public sector officials for gaining access to public funds, protection, information and other services that contribute to criminal activities. Such activities have a serious impact on the industries, government, and national security. These organized crimes usually have multiple consequences as there is a risk of links between the public sector and crime groups. It is challenging to identify and investigate the source of corruption as there is mutual consent between the two involved persons. Hence, it is difficult to trace the corrupt individual (Nur-tegin and Czap 2012). There are six theories that are related to causes of corruption.

Public Choice Theory

The theory was developed by Gordon Tullock and James Buchanan, who explain the basis of making public decisions. The causal chain is related with an individual making a rational decision for a predetermined outcome. The person making the decision is calculative as he decides to act corruptly because he identifies the number of gains to him would identify the disadvantages. There are situations where the potential benefits due to corruption are greater than the potential disadvantages or costs (Dunleavy 2014). Trust plays an important role in the theory as there are fewer chances of getting caught. The argument applies to a particular situation and not for general determining factors. The theory does not account for triggering sources within a particular situation. This theory usually involves the interaction of politicians, voting public, political action committees and bureaucracies (Dreher and Gassebner 2011).

Bad apple theory

The theory focuses on seeking the cause of faulty moral character within people. These faults are called bad-apples in the theory. The cause of corruption is because of defective moral values such as greed. These characteristic features predispositions a person towards criminal activity and corruptive practices. According to this theory, wrong values are the cause of corruption. The official is after material gain such as money, higher social standing, etc. This theory is usually applicable for police officers as they have to fulfill public expectations. The theory is hardly based on empirical claims. Social control theory may apply for controlling corruption by changing moral beliefs and aspirations (Gottschalk 2011).

Organizational culture theories

The literature determines the corruption by organizational structure and systems, but not individuals who perform corrupt practices. There are certain features or unethical practices in the organization that forms a corrupt culture with underlying assumptions, norms, and values. The theory determines that there are certain conditions or systems in the organization that leads to corruption. There are dynamics that transcend individuals. The theory believes that an once an organizational culture is corrupt, every person in the organization are under the risk of becoming corrupt (Campbell and Göritz 2013).

Clashing moral values theories

The literature differentiates between private obligations and public role of corrupt officials. It is caused due to influence of values and norms of society. These values and norms held by the society make the individuals make them corrupt. For instance, gift giving is highly valued and pervasive in the private sector. Morality plays an important role in causing corruption. Values help in determining behavior. There are situations where the values of the family are stronger that help in making a good official; the resources are often used to benefit the family or any other personal interest group. Officials may feel obliged to help their personal interest group due to a clash between morality and ethical responsibility. The macro morality requires the officials to treat people differently whereas micro morality requires the officials to help their close ones wherever possible (Fukuyama 2014).

The ethos of public administration theories

This theory is closely linked with organizational culture theories except for concern towards culture in society. The political and economic structures are studied in this theory. The theory creates societal pressure through levels of the organization. There is a lack of focus and attention on organizational effectiveness. If certain public sectors are reformed, there is a chance that the administration becomes hollow. The new structure or reform may lack fundamental values. In these situations, the public officials do not aim to serve the greater good of society. The literature focuses on the morality of society being wrong. The situations are usually encountered in emerging democracies (Salminen and Mäntysalo 2013).

Correlation theories

The correlation model considers all possible aspects such as individual, societal and organizational levels. This theory does not study individual cases but considers macro-variables such as poverty, organized crime, the income of public servants, political stability, and democracy. The income of a country is directly linked with political and economic systems. Corruption is associated with the values and norms of individual politicians and civil servants, the lack of commitment to the public integrity of leadership, organizational problems and failures, the relationship between the public sector and business, and the strength of organized crime (Balan and Knack 2012).

Research Methodology and Analysis

 Research Methodology

The data was also collected through primary research method of personal interviewing and questionnaire. The questions were asked to the respondents in the same manner. The method of interviewing was chosen because an instant reaction could be observed on their face and there was less chance of hiding information. The data is mainly collected from secondary sources such as newspaper articles, academic journals, and other reliable sources. Major data and findings are collected from the survey conducted by Transparency International’s global corruption barometer.

Sampling

For primary data, the sample size was chosen as 50 respondents out of which 26 people were public servants. The number of respondents was sufficient to provide information on common causes of corruption. The secondary data is collected for 114,000 people in 107 countries across the world through Transparency International’s global corruption barometer (Evans 2013).

Ethical Considerations

The process of data collection had several ethical considerations such as non-voluntary participation of people. The respondents were not forced to provide information or involve in interviewing process. No names are quoted in the report and confidentiality is maintained through data processing.

 Discussion and Implications

Data Findings

According to the primary data analysis, 35% respondents considered poor salaries to be a major cause of corruption. Personal greed, civil society contribution, lack of accountability were other responses contributing to the remaining 65%. According to the reports of Transparency International's Global Corruption Barometer 2013, there has been an increase in corruption by 65% where a primary reason has been a bribe. The investigations further state that there has been an increasing in paying bribes to 5% in the year 2013 (Evans 2013).

Across the world, the government has made efforts that have been reducing over the years. It was reported that the efforts reduced to 22% from 31% in 2013. 78% of the Egyptians reported that the police were either corrupt or extremely corrupt (Evans 2013). According to the report by HM Inspectorate of Constabulary, UK had an increase in some corrupt police officers (Evans 2013). One person in 20 claims to have paid a bribe in the past year to access public services ranging from health and education to justice in Britain (Darbyshire 2015). The media and politicians were most corrupt reporting up to 69 percent and 66 percent (Owen 2013).

Critical Discussion

Corruption is a destructive force that has affected countries across the world. Crime is caused by many factors such as lack of accountability, low salaries, political instability, insecure officials, personal ambition or greed, working conditions and civil society contribution. Corruption is a social phenomenon that 's hard to define. The abuse of power for personal gain is corruption. Public sector corruption varies according to geographical locations. Corruption has various forms such as bribery, embezzlement, fraud, transfer of information, intimidation, extortion, nepotism, conflict of interest, abuse of power, money laundering, identity theft and illegal contributions. These are the forms of corruption in the public sector as they are the most common means for getting the work done (Koudelková and Senichev 2015).

The Transparency International Corruption Perceptions Index has been available since 1995 and has been used extensively as the basis for indicators of the extent and likelihood of corruption in a given location. There are countries that had an unstable political stability due to human rights abuses. These factors lead to a decline in political interference and real wages. These factors gave rise to necessities in taking bribes. The level of social trust in a particular context is an external factor that has not received as much attention but has been observed to have an economic and political impact (Cooper 2012).

The non-compliance to formal procedures and inexperienced officials centrally pursued corruption. There is a high incidence of poverty, rising costs of living and economic hardships that force public officials to seek bribes. It becomes difficult for the workers to follow norms and high ideals of integrity. There are times and situations when the higher officials felt insecure and threatened because of job security. These conditions force the officials to plunder a mass of opportunity with a fear of getting thrown out of office. There are personal greed and ambition involved with people. There are unrestrained desires of getting rich or having a dilemma of keeping their families under private benefits (Ijewereme 2015).

Future Implications

The research or causal factors can help in framing anti-corruptive practices. These factors must be addressed by the government and measures must be taken to resolving issues. The needs and factors that would eliminate corruption in the public sector must be addressed and taken into consideration. The causes of crime can also be used for providing future recommendations that would build a zero tolerance institution (Cooper 2012).

Conclusion

The article reviews the concept and causes of corruption in public sector. Corruption undermines the growth of a sound economic base which is the hallmark of the substance of the democratic culture. In its various forms corruption results in the malfunctioning of the economic system which in term effects such things as increased National debt, failed development projects and increased the poverty of the people. The aim of this study is to define and address the causes of corruption that is leading to global impacts. Corruption has a major impact on the political and economic system that affects participation and representation in the society. Every country is ranked on The Transparency International index that determines the level of corruption practiced by a particular country or economy. These rankings are based by several criterions such as embezzlement of public funds, bribery to public servants, the effectiveness of anti-corruption efforts and cuts in public procurement.

References

Adler, P., 2012. PERSPECTIVE—The Sociological Ambivalence of Bureaucracy: From Weber via Gouldner to Marx. Organization Science, 23(1), pp.244-266.

Balan, D. and Knack, S., 2012. The correlation between human capital and morality and its effect on economic performance: Theory and evidence. Journal of Comparative Economics, 40(3), pp.457-475.

Campbell, J. and Göritz, A., 2013. Culture Corrupts! A Qualitative Study of Organizational Culture in Corrupt Organizations. J Bus Ethics, 120(3), pp.291-311.

Cooper, J., 2012. Noble cause corruption as a consequence of role conflict in the police organisation.Policing and Society, 22(2), pp.169-184.

Darbyshire, N., 2015. The shocking truth about police corruption in Britain. [online] The Spectator. Available at: <https://www.spectator.co.uk/2015/03/the-shocking-truth-about-police-corruption-in-britain/> [Accessed 24 Jan. 2016].

Department for International Development, 2015. Why corruption matters: understanding causes, effects and how to address them. [online] Available at: <https://Why corruption matters: understanding causes, effects and how to address them> [Accessed 24 Jan. 2016].

Doig, A. and Theobald, R., 2013. Corruption and democratisation. London: Frank Cass.

Dreher, A. and Gassebner, M., 2011. Greasing the wheels? The impact of regulations and corruption on firm entry. Public Choice, 155(3-4), pp.413-432.

Dunleavy, P., 2014. Democracy, bureaucracy and public choice. 3rd ed. New York: Harvester.

Evans, B., 2013. UK corruption getting worse poll finds as one in 20 Britons admit to bribing public service officials. [online] Mail Online. Available at: <https://www.dailymail.co.uk/news/article-2358665/UK-corruption-getting-worse-poll-finds-20-Britons-admit-bribing-public-service-officials.html> [Accessed 24 Jan. 2016].

Fukuyama, F., 2014. State-building: Governance and World Order in the Twenty-First-Century. 3rd ed. Ithaca, N.Y.: Cornell University Press.

Gottschalk, P., 2011. White-Collar Crime and Police Crime: Rotten Apples or Rotten Barrels?. Crit Crim, 20(2), pp.169-182.

Huberts, L., 2014. Integrity of governance.

Ijewereme, O., 2015. Anatomy of Corruption in the Nigerian Public Sector: Theoretical Perspectives and Some Empirical Explanations. SAGE Open, 5(2).

Ijewereme, O., 2015. Anatomy of Corruption in the Nigerian Public Sector: Theoretical Perspectives and Some Empirical Explanations. SAGE Open, 5(2).

Koudelková, P. and Senichev, V., 2015. Mix Research Approach towards Corruption – Experts’ Perception: Challenges and Limitations. Procedia - Social and Behavioral Sciences, 175, pp.39-47.

Nur-tegin, K. and Czap, H., 2012. Corruption: Democracy, Autocracy, and Political Stability. Economic Analysis and Policy, 42(1), pp.51-66.

Owen, J., 2013. Britain's bribery boom: One in 20 has bribed a public official as. [online] The Independent. Available at: <https://www.independent.co.uk/news/uk/home-news/britains-bribery-boom-one-in-20-has-bribed-a-public-official-as-corruption-rises-8696181.html> [Accessed 24 Jan. 2016].

Palermo, T., 2014. Accountability and Expertise in Public Sector Risk Management: A Case Study.Financial Accountability & Management, 30(3), pp.322-341.

Ramady, M., 2013. Political, economic and financial country risk.

Salminen, A. and Mäntysalo, V., 2013. Exploring the Public Service Ethos. Public Integrity, 15(2), pp.167-186.

Transparency.org, 2016. Transparency International - The Global Anti-Corruption Coalition. [online] Available at: <https://www.transparency.org/> [Accessed 24 Jan. 2016].

Yeboah-Assiamah, E., Asamoah, K., Bawole, J. and Musah-Surugu, I., 2016. A socio-cultural approach to public sector corruption in Africa: key pointers for reflection. Journal of Public Affairs, p.n/a-n/a.