Corruption

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Political corruption
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Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by private persons or corporations not directly involved with the government. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties.
Forms of corruption vary, but include bribery, extortion, cronyism, nepotism, patronage, graft, and embezzlement. While corruption may facilitate criminal enterprise such as drug trafficking, money laundering, and human trafficking, it is not restricted to these activities.
The activities that constitute illegal corruption differ depending on the country or jurisdiction. For instance, certain political funding practices that are legal in one place may be illegal in another. In some cases, government officials have broad or poorly defined powers, which make it difficult to distinguish between legal and illegal actions. Worldwide, bribery alone is estimated to involve over 1 trillion US dollars annually.[1] A state of unrestrained political corruption is known as a kleptocracy, literally meaning "rule by thieves".
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[edit] Effects
[edit] Effects on politics, administration, and institutions

Detail from Corrupt Legislation (1896) by Elihu Vedder. Library of Congress Thomas Jefferson Building, Washington, D.C.
Corruption poses a serious development challenge. In the political realm, it undermines democracy and good governance by flouting or even subverting formal processes. Corruption in elections and in legislative bodies reduces accountability and distorts representation in policymaking; corruption in the judiciary compromises the rule of law; and corruption in public administration results in the inefficient provision of services. More generally, corruption erodes the institutional capacity of government as procedures are disregarded, resources are siphoned off, and public offices are bought and sold. At the same time, corruption undermines the legitimacy of government and such democratic values as trust and tolerance.
Economic effects
Corruption undermines economic development by generating considerable distortions and inefficiency. In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting red tape, the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms.
Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal or pave the way for such dealings, thus further distorting investment. Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government.
Economists argue that one of the factors behind the differing economic development in Africa and Asia is that in the former, corruption has primarily taken the form of rent extraction with the resulting financial capital moved overseas rather than invested at home (hence the stereotypical, but often accurate, image of African dictators having Swiss bank accounts). In Nigeria, for example, more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999.[2] University of Massachusetts researchers estimated that from 1970 to 1996, capital flight from 30 sub-Saharan countries totaled $187bn, exceeding those nations' external debts.[3] (The results, expressed in retarded or suppressed development, have been modeled in theory by economist Mancur Olson.) In the case of Africa, one of the factors for this behavior was political instability, and the fact that new governments often confiscated previous government's corruptly-obtained assets. This encouraged officials to stash their wealth abroad, out of reach of any future expropriation. In contrast, Asian administrations such as Suharto's New Order often took a cut on business transactions or provided conditions for development, through infrastructure investment, law and order, etc.
Environmental and social effects
Corruption facilitates environmental destruction. Corrupt countries may formally have legislation to protect the environment, it cannot be enforced if officials can easily be bribed. The same applies to social rights worker protection, unionization prevention, and child labor. Violation of these laws rights enables corrupt countries to gain illegitimate economic advantage in the international market.
The Nobel Prize-winning economist Amartya Sen has observed that "there is no such thing as an apolitical food problem." While drought and other naturally occurring events may trigger famine conditions, it is government action or inaction that determines its severity, and often even whether or not a famine will occur. Governments with strong tendencies towards kleptocracy can undermine food security even when harvests are good. Officials often steal state property. In Bihar, India, more than 80% of the subsidized food aid to poor is stolen by corrupt officials.[4] Similarly, food aid is often robbed at gunpoint by governments, criminals, and warlords alike, and sold for a profit. The 20th century is full of many examples of governments undermining the food security of their own nations – sometimes intentionally.[5]

Effects on Humanitarian Aid
The scale of humanitarian aid to the poor and unstable regions of the world grows, but it is highly vulnerable to corruption, with food aid, construction and other highly valued assistance as the most at risk.[6] Food aid can be directly and physically diverted from its intended destination, or indirectly through the manipulation of assessments, targeting, registration and distributions to favour certain groups or individuals.[6] Elsewhere, in construction and shelter, there are numerous opportunities for diversion and profit through substandard workmanship, kickbacks for contracts and favouritism in the provision of valuable shelter material.[6] Thus while humanitarian aid agencies are usually most concerned about aid being diverted by including too many, recipients themselves are most concerned about exclusion.[6] Access to aid may be limited to those with connections, to those who pay bribes or are forced to give sexual favours.[6] Equally, those able to do so may manipulate statistics to inflate the number beneficiaries and syphon of the additional assistance.[6]
Other areas: health, public safety, education, trade unions, etc.
Corruption is not specific to poor, developing, or transition countries. In western European countries, there have been cases of bribery and other forms of corruption in all possible fields: under-the-table payments made to reputed surgeons by patients willing to be on top of the list of forthcoming surgeries, bribes paid by suppliers to the automotive industry in order to sell poor quality connectors used for instance in safety equipment such as airbags, bribes paid by suppliers to manufacturers of defibrillators (to sell poor quality capacitors), contributions paid by wealthy parents to the "social and culture fund" of a prestigious university in exchange for it to accept their children, bribes paid to obtain diplomas, financial and other advantages granted to unionists by members of the executive board of a car manufacturer in exchange for employer-friendly positions and votes, etc. Examples are endless. These various manifestations of corruption can ultimately present a danger for the public health; they can discredit certain essential institutions or social relationships.
Corruption can also affect the various components of sports activities (referees, players, medical and laboratory staff involved in anti-doping controls, members of national sport federation and international committees deciding about the allocation of contracts and competition places).
There have also been cases against (members of) various types of non-profit and non-government organisations, as well as religious organisations.
Ultimately, the distinction between public and private sector corruption sometimes appears rather artificial and national anti-corruption initiatives may need to avoid legal and other loopholes in the coverage of the instruments.
Types
Bribery
Main article: Bribery
A bribe is a payment given personally to a government official in exchange of his use of official powers. Bribery requires two participants: one to give the bribe, and one to take it. Either may initiate the corrupt offering; for example, a customs official may demand bribes to let through allowed (or disallowed) goods, or a smuggler might offer bribes to gain passage. In some countries the culture of corruption extends to every aspect of public life, making it extremely difficult for individuals to stay in business without resorting to bribes. Bribes may be demanded in order for an official to do something he is already paid to do. They may also be demanded in order to bypass laws and regulations. In addition to using bribery for private financial gain, they are also used to intentionally and maliciously cause harm to another (i.e. no financial incentive). In some developing nations, up to half of the population has paid bribes during the past 12 months.[7]
In recent years, efforts have been made by the international community to encourage countries to dissociate and incriminate as separate offences, active and passive bribery. Active bribery can be defined for instance as the promising, offering or giving by any person, directly or indirectly, of any undue advantage [to any public official], for himself or herself or for anyone else, for him or her to act or refrain from acting in the exercise of his or her functions. (article 2 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe). Passive bribery can be defined as the request or receipt [by any public official], directly or indirectly, of any undue advantage, for himself or herself or for anyone else, or the acceptance of an offer or a promise of such an advantage, to act or refrain from acting in the exercise of his or her functions (article 3 of the Criminal Law Convention on Corruption (ETS 173)). The reason for this dissociation is to make the early steps (offering, promising, requesting an advantage) of a corrupt deal already an offence and, thus, to give a clear signal (from a criminal policy point of view) that bribery is not acceptable. Besides, such a dissociation makes the prosecution of bribery offences easier since it can be very difficult to prove that two parties (the bribe-giver and the bribe-taker) have formally agreed upon a corrupt deal. Besides, there is often no such formal deal but only a mutual understanding, for instance when it is common knowledge in a municipality that to obtain a building permit one has to pay a "fee" to the decision maker to obtain a favourable decision. A working definition of corruption is also provided as follows in article 3 of the Civil Law Convention on Corruption (ETS 174): For the purpose of this Convention, "corruption" means requesting, offering, giving or accepting, directly or indirectly, a bribe or any other undue advantage or prospect thereof, which distorts the proper performance of any duty or behaviour required of the recipient of the bribe, the undue advantage or the prospect thereof.
Governmental corruption of judiciary
Governmental corruption of judiciary includes governmental spending on the courts, which is completely financially controlled by the executive in many transitional and developing countries. This undermines the principle of checks and balances and creates a critical financial dependence on the judiciary. It covers latent governmental spending on the judiciary in the form of privileges – cars, country houses,expenses. Such a system is completely outside the realm of transparency and creates a precedent for the corruption of the judiciary by executive authorities.
Trading in influence
Trading in influence, or influence peddling in certain countries, refers to the situation where a person is selling his/her influence over the decision process involving a third party (person or institution). The difference with bribery is that this is a tri-lateral relation. From a legal point of view, the role of the third party (who is the target of the influence) does not really matter although he/she can be an accessory in some instances. It can be difficult to make a distinction between this form of corruption and certain forms of extreme and poorly regulated lobbying where for instance law- or decision-makers can freely "sell" their vote, decision power or influence to those lobbyists who offer the highest retribution, including where for instance the latter act on behalf of powerful clients such as industrial groups who want to avoid the passing of certain environmental, social, or other regulations perceived as too stringent, etc. Where lobbying is (sufficiently) regulated, it becomes possible to provide for a distinctive criteria and to consider that trading in influence involves the use of "improper influence", as in article 12 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe.
Patronage
Main article: Patronage
Patronage refers to favoring supporters, for example with government employment. This may be legitimate, as when a newly elected government changes the top officials in the administration in order to effectively implement its policy. It can be seen as corruption if this means that incompetent persons, as a payment for supporting the regime, are selected before more able ones. In nondemocracies many government officials are often selected for loyalty rather than ability. They may be almost exclusively selected from a particular group (for example, Sunni Arabs in Saddam Hussein's Iraq, the nomenklatura in the Soviet Union, or the Junkers in Imperial Germany) that support the regime in return for such favors. A similar problem can also be seen in Eastern Europe, for example in Romania, where the government is often accused of patronage (when a new government comes to power, in a few months time it changed most of the officials in the public sector).
Nepotism and cronyism
Main articles: Nepotism and Cronyism
Favoring relatives (nepotism) or personal friends (cronyism) of an official is a form of illegitimate private gain. This may be combined with bribery, for example demanding that a business should employ a relative of an official controlling regulations affecting the business. The most extreme example is when the entire state is inherited, as in North Korea or Syria. A milder form of cronyism is an "old boy network", in which appointees to official positions are selected only from a closed and exclusive social network – such as the alumni of particular universities – instead of appointing the most competent candidate.
Seeking to harm enemies becomes corruption when official powers are illegitimately used as means to this end. For example, trumped-up charges are often brought up against journalists or writers who bring up politically sensitive issues, such as a politician's acceptance of bribes.
In the Indian political system, leadership of national and regional parties are passed from generation to generation creating a system in which a family holds the center of power, some examples are most of the dravidian parties of south India and also the largest party in India - Congress.
Electoral fraud
Main article: Electoral fraud
Electoral fraud is illegal interference with the process of an election. Acts of fraud affect vote counts to bring about an election result, whether by increasing the vote share of the favored candidate, depressing the vote share of the rival candidates, or both. Also called voter fraud, the mechanisms involved include illegal voter registration, intimidation at polls, and improper vote counting.
Embezzlement
Main article: Embezzlement
Embezzlement is outright theft of entrusted funds. It is a misappropriation of property.
Another common type of embezzlement is that of entrusted government resources; for example, when a director of a public enterprise employs company workers to build or renovate his own house.
Kickbacks
A kickback is an official's share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. For example, suppose that a politician is in charge of choosing how to spend some public funds. He can give a contract to a company that is not the best bidder, or allocate more than they deserve. In this case, the company benefits, and in exchange for betraying the public, the official receives a kickback payment, which is a portion of the sum the company received. This sum itself may be all or a portion of the difference between the actual (inflated) payment to the company and the (lower) market-based price that would have been paid had the bidding been competitive. Kickbacks are not limited to government officials; any situation in which people are entrusted to spend funds that do not belong to them are susceptible to this kind of corruption. Kickbacks are also common in the pharmaceutical industry, as many doctors and physicians receive pay in return for added promotion and prescription of the drug these pharmaceutical companies are marketing. (See: Anti-competitive practices, Bid rigging.)
Unholy alliance
An unholy alliance is a coalition among seemingly antagonistic groups, especially if one is religious,[8] for ad hoc or hidden gain. Like patronage, unholy alliances are not necessarily illegal, but unlike patronage, by its deceptive nature and often great financial resources, an unholy alliance can be much more dangerous to the public interest. An early, well-known use of the term was by Theodore Roosevelt (TR):
"To destroy this invisible Government, to dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day." – 1912 Progressive Party Platform, attributed to TR[9] and quoted again in his autobiography[10] where he connects trusts and monopolies (sugar interests, Standard Oil, etc.) to Woodrow Wilson, Howard Taft, and consequently both major political parties.

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