Tag: corruption

Categories
Economics

[2388] Nudge, nudge, wink, wink

It is the practice of some labor unions to produce one or several publications annually to inform their members of various activities and developments related to the unions.

As with many things in this world, it costs money to produce these publications. These unions finance the publications through a number of ways. Membership fee is one example. Another is selling advertising space to non-members, especially to the business community. This, however, can be an ethically grey area.

This kind of funding can be ethically iffy if the union members comprise employees of public regulators or law enforcement agencies, like the police, the Fire Department or Customs. This particular interaction between the unionized employees and the business community through the sale of advertising space creates perverse incentive.

It is a potential channel for corruption. It has the ability to affect adversely the traditional relationship between the public and the government.

Everybody deals with some of these regulators and enforcers in one way or another. The police maintain public order. The Fire Department apart from firefighting ensures public adherence to certain codes. City Hall and other local councils enforce even more codes. Many other regulators and enforcers exist out there to match the hundreds or thousands of laws that govern too many things.

Services provided by the enforcers and the regulators are funded by public money. To put it simply, the public pays for the services and these government arms render the services to the public. This is the traditional relationship. It is simple and clean.

This traditional relationship between the two must not be influenced by any other factor, lest the regulators and the enforcers filter their customers for their own benefit.

The sale of advertising space by unions especially to business establishments twists the traditional relationship by creating another channel for the public to interact with the regulators and the enforcers. That new channel runs through the unions to form a special relationship between the space purchasers and sellers, who are part of the government or its agencies.

There are at least three ways this is detrimental to the traditional relationship.

One, the sale and purchase of advertising space can be done by the business community to return a favor previously done or will be done by certain unionized employees. This is downright corruption.

Two, the sellers, who are employees of the government bodies and agencies, will feel indebted to the purchasers. It is a profitable relationship and one always keeps profitable relationship intact.

By doing so, the purchasers will have special relationship with the seller and, implicitly, to the regulators and enforcers. Those particular employees or any member of the union may systematically handle future requests or transgressions by the sellers leniently. This runs contrary to the ideal that prescribes everybody as equal before the law.

Three, even without such favors or the feeling of indebtedness, a mere request by the unions may create consternation among the solicited. A forward-looking person, and especially businesses, upon receiving the advertising request would ask, how would this affect us? For those who conclude that a negative reply would affect the likelihood of approval to future transactions, they might feel compelled to purchase the space from the unions. This can happen even if there is no intention by the union to abuse its influence. In other words, it creates a perception of corruption even though there is no actual corruption.

The way the incentives have been perversely structured inadvertently or otherwise may make it necessary for the relevant authority to look into this particular activity of these particular unions.

Despite all that, this is not to say that there is actual corruption in the system. This may sound like a cop-out but the whole structure is an opportunity for corruption nevertheless.

Individuals are not inherently good or bad, clean or corrupt. Many times, it is the institutions that provide the incentives for corrupt practice to flourish.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

First published in The Malaysian Insider on June 27 2011.

 

Categories
Economics Politics & government Society

[2286] Of underestimation in Transparency International’s report

While I am at the issue of bribery, I would like to touch on the recently released Transparency International’s Global Corruption Barometer 2010 report that the chart from the Daily Chart blog is based on.

After reading it, or rather, skimming through it, I suspect some of the results underestimate what are actually happening on the ground. Of a particular interest in one question where it asks whether the questionnaire participant has bribed a public official within the past 12 months. According to the report, in Malaysia the survey was done through face to face method.[1]

Now ask this question. If some stranger asked, ”Have you bribed a public official before?”, what would be your answer?

Given that you do not know who the stranger is, and if you have bribed a public official before, would you actually say yes?

What if the stranger is a police officer and he or she is trying to trap you? What if the stranger recognizes you and reports you to the police after the interview? What if the stranger shares the information with the public, thus ruining your reputation?

Would it not be safer to say no?

I would think there is an incentive to be dishonest and say no. It is the most rational action to take given the uncertainty caused by the face to face method.

Thus, the aggregate answer to the question is likely to underestimate the true occurrence of this specific kind of bribery.

The further implication arising from this problem is this: the report indicates that 9% of members of the Malaysian sample have bribed a public official before in the last 12 months. Assuming good faith that the survey is representative, one could generalize that 9% of Malaysians have bribed a public official before. Due to the concern of underestimation however, the best one could say about the result is that at least 9% of Malaysians have bribed public official before in the same period.

If one wants to take the implication to the extreme, notice that there is no qualification about the maximum limit. Scary, is it not?

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[1] — Global Corruption Barometer 2010. Page 35 and 39. Transparency International. December 2010

Categories
Economics Politics & government Society

[2285] Of why is bribery wrong?

Bribery is wrong. That is a given. Yet surprisingly, I am struggling to explain why it is wrong.

The best I can come up with without referring to other sources is that bribery undermines a system of rules and it gives those involved in the transaction unfair advantage against those who adhere to the rules.

This casts too wide a net however, hence an imperfect reasoning. Not all rules are good and bad rules should be broken. Without looking into what separates the good rules from the bad, the breaking of good rules is a necessary condition in making bribery wrong but it is not a sufficient condition. The determination of wrongness depends on the kind of rules being broken.

Unfairness is also only a necessary condition but the concern for unfairness is only secondary because it arises from the breaking of rules. If a rule is broken, then it is immediately unfair because there are those who follow the rules, with an exception that I will go into below near the end of this entry.

The collective necessary conditions can be construed as the sufficient condition.

Is there any other sufficient condition?

I can at least define a minimum why bribery is wrong, which I propose as another sufficient condition. This goes back to the rationale of establishment of a third party or the state to protect individual rights. If a person bribes the authority to erode the rights of others to the briber’s benefit, then the briber has committed a wrong. When the rules involve individual rights, then the breaking of these specific rules becomes the sufficient condition for bribery to be wrong.

This minimum or sufficient condition is highly unsatisfactory however. Bribery can be wrong even when it does not involve the protection of individual rights. Consider a person who wants a document be kept confidential and there is a company offering safekeeping service, much like a bank. The person engages the company. And then, a third party becomes interested in the document and bribes the company in order to access the document. Quite clearly, a wrong has been committed. Or, maybe the wrong is not due to bribery but due to a breach of trust? I do not know. It requires more thinking.

In any case, if the idea that bribery is wrong is dependent on the idea of rule-breaking, then what if there is no rule? Would bribery be wrong under that situation? Under this situation, bribery ceases to be a concern anymore because the idea of bribery ceases to exist. Any action that can be construed as bribery under rule-based environment suddenly becomes just another mundane transaction in the marketplace under no-rule environment. Bribery simply becomes a purchase of service.

Now comes to the original question that piqued my interest in the idea of bribery in the first place, that subsequently made me to question my basic understanding of why bribery is wrong. What if there are rules but everybody breaks it? The Daily Chart blog at The Economist has a chart reproducing the findings on corruption from Transparency International.[1]

It shows that in Liberia, nearly 90% member of the public had bribed an official. Nearly ninety percent is nearly everybody. I am highlighting this because if everybody does it, it effectively takes the necessary condition of fairness out of the equation. Since nobody follows the rules, then the person who engages in bribery is not being unfair to anybody. Without the fulfilment of the necessary condition of unfairness, does bribery cease to become a wrong?

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

[1] — ONE in four people paid a bribe during the past year, according to the latest Global Corruption Barometer, which is published annually by Transparency International, an anti-corruption campaign group… Among the countries surveyed, this kind of everyday corruption was most prevalent in Liberia. Britain was the cleanest. [Something for your troubles. Daily Chart. December 9 2010]

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p/s — I have found two very good short pieces by Richard Posner on corruption in general. They are:

  1. Economics of Corruption
  2. Corruption

I especially like Posner’s distinction between corruption in the public and private spheres. In retrospect, this blog post of mine involves bribery in the public sphere, i.e. public institutions.

Categories
Politics & government Sports

[2255] Of the Commonwealth Games disaster is good for India

A friend shared his thought about the upcoming Commonwealth Games in New Delhi, which poises to be a disaster, the other day. The Economist with its typical humor wrote:

INDIAN officials insist that the Commonwealth games, to which Delhi plays host in October, should not be compared to Beijing’s Olympic games. They are right. The 2008 Olympics were a symbol of China’s emergence as a great power. The Commonwealth ones seem to be heading for disaster. [Running into the sand. The Economist. August 12 2010]

Allegations of corruption revolving around the Games are everywhere and it is likely that these allegations are true. On top of that, New Delhi is seriously behind schedule, despite the Games being just less than two weeks away.

The friend, in addition to saying that nobody cares about the Games, states that the disaster is good for India. For the longest time, India has its own way of doing things. The way the Games is developing even before it begins, it is likely to be a very public embarrassment for the country. That embarrassment might prove to be big enough for India to buck up and encourage the country to do something about the widespread corruption, and the  Indian (government’s) way in general that appears to be chaotic.

Categories
Personal Politics & government Society

[2171] Of a story of migration

A dear friend was in Sydney recently. For old times’ sake, he called me up and asked if I was free for the day. I said yes. How could I say no? Both of us are Malaysians and both of us attended Michigan. We had some good times together.

We had not met for a long time prior to that meeting in Sydney. The last time we had a meal together was in Singapore, when we visited yet another alumnus of Michigan. That was a good four years ago.

February is a good time to visit the city of Harbour Bridge and Opera House. Apart from the rain, the weather is generally just fantastic. There are tons of activities to do without the need to worry about the presence of morality police. When they are not cracking jokes and become all-sarcastic, which is cute, Sydneysiders will generally leave you alone. To find a close friend visiting Sydney should not be a puzzle.

We had a long chat, reminiscing the days in good old Ann Arbor, our spur-of-the-moment road trip into the heart of South Dakota and our childish arguments. And we updated each other about our mutual close friends. I learnt that one is working in Germany.

Several are living in the United States. Another is just due west in Melbourne.

The conversation went on innocently until I felt that something was amiss. He asked, “How are they toward you?” He was referring to Australians.

The question slightly took me aback. I figured he was concerned with reports of racism in Australia. The country does have issues with racism. It is not as prevalent as in Malaysia but it is a problem nonetheless.

Yet, his tone was one not of interest in current affairs, or a concern for me. It is a tone reserved for the motive of self-interest. I became suspicious of his motive and began to challenge my assumption that he was here for vacation.

“Why are you here, exactly?” Jokingly, I added, “Do you really miss me that much?”

His answered forthrightly. He already had his application for permanent residency approved by the Australian immigration. All he needed was to have his passport stamped at an Australian gate. He needed to do that to activate his permanent resident status. “And here I am.”

I have friends who have decided to live abroad, or who have left Malaysia for good. I have heard and read stories of strangers, Malaysians nonetheless, doing the same. It is not a rare phenomenon but to hear it from him”¦ somehow, his answer surprised me.

My reaction to those who find solutions in migration had been, please, do not go, or if you do go, do come back.

It is almost a plea, because more often than not, those who chose to migrate share my values: liberty and equality. The more Malaysians holding these values leave, the harder will it be to man the dike against the tide of illiberalism, a hodgepodge of racism, religious bigotry and lack of trust in individuals that Malaysian politics is known for.

Under the bright sun, I did not find myself making such plea to him. I myself am unsure what the future holds for me any longer. Such act of convincing appeared futile to me, when I can hardly convince myself of it.

For a short moment, my mind raced to another occasion, where an Australian friend asked what I would do after earning a Master’s degree. I told him what I told so many others, “I don’t know.”

“Why don’t you just stay here? There are so many problems in Malaysia. I can’t find a reason why anybody would want to be there. Even you, as a Malay, get discriminated simply because you refuse to blend in. Besides, the pay here is much better, don’t you think so? What is the PPP per capita for Malaysia? Australia’s is over thirty thousand US dollar.”

At yet another occasion, a Malaysian who has been residing and working in Sydney for some time asked me the same question. I told him that I do not know but I would return to Malaysia.

“Why?”

I said because it is home.

“It is good that you still have the notion of home. As for me, it means nothing anymore.” He said that with incredible nonchalance that I almost took it as an insult. Deep inside of my heart however, I know that home is where liberty is.

My mind returned to the moment. Kids in school uniforms were flowing out of a building. Near the door, there was a banner, suggesting that these kids were there for some sort of recital.

The plaza besides the Town Hall is always buzzed with activities. Just days ago, a group of Iranians were there to remember February 11, the 21st anniversary of the collapse of the Pahlavi dynasty.

The Islamic Republic of Iran rose over the ashes of old Persia soon after that. I am unsure which one of these two is worse but I know for sure that they do not have the same liberty in Iran to hold public gatherings. Or in Malaysia for that matter.

I had to return to the moment.

“Will you apply for citizenship?”

“No,” he said.

“Why not take the extra step and be done with it?” I was the devil’s advocate.

“Malaysia is a good country. Only those who are managing the country are not.”

He did not see me rolled my eyes. I was not dismissing his opinion.

On the contrary, I share his sentiment. All I wanted to do was to let go a silent sigh.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

This article was first published in The Malaysian Insider on March 2 2010.