An economic perspective of corruption<\/p>\n
Barlev Nicodemus, Brussels<\/p>\n
One of Indonesia's main problems since becoming a democracy
\nhas been corruption. Numerous seminars, workshops and public
\ndiscussions on the topic have been held. Different approaches
\nhave been tried to tackle the problem, including the religious
\napproach. Nahdlatul Ulama, the country's largest Muslim
\norganization, once proposed allowing those involved in corruption
\nto be buried without prayers. Still, Indonesia is among the most
\ncorrupt countries in the world, according to Transparency
\nInternational.<\/p>\n
Why is it so difficult to combat corruption?<\/p>\n
An article in The Jakarta Post (Fighting corruption through
\ncivil service reform, March 24) discussed how to fight
\ncorruption. The writer nicely opened the article by asking what
\nwere the roots of corruption. Based on an interview with Vice
\nPresident Jusuf Kalla, two main sources of corruption were
\nidentified as an unreformed bureaucracy and government
\nprocurement practices.<\/p>\n
The article confirmed that Indonesia has a problem in its
\nbureaucracy. The latest report from Transparency International
\nIndonesia carried a similar message. Public officers across the
\ncountry are inclined toward corruption. Therefore, reforming
\nbureaucracy and improving government procurement practices are
\ncrucial. However, while these might be the main sources of
\ncorruption, the roots of corruption are still unclear.<\/p>\n
This article wants to describe the roots of corruption based
\non an economic approach.<\/p>\n
In daily life, people have to make choices. A particular
\nchoice will be taken based on inducement, incentives. In a
\npractical perspective, the incentives can be a carrot (benefit
\nsuch as a reward) or a stick (costs such as punishment).
\nConsequently, as economic theory says, people compare the costs
\nand benefits before making a choice or taking an action. If the
\nbenefits exceed the costs, he\/she will take the action. If no,
\nhe\/she will not take the action.<\/p>\n
Corruption is one example of a particular action. But before
\ntaking the action, compare the costs and benefits. Consider the
\ncivil servants in the bureaucracy. It is known that civil
\nservants would be unable to lead normal lives on their meager
\nsalaries. The benefit of corruption therefore is very clear.
\nCorruption is an additional source of income. How about the
\ncosts? Since the rule of law does not exist, there is nothing to
\nworry about.<\/p>\n
It is not surprising to that corruption is so rampant under
\nsuch circumstances. For low-level civil servants, corruption is a
\nmatter of survival. Their salaries cannot cover their living
\nexpenses. The only choice left is to take money from corruption.
\nSince they don't have any physical goods to sell, their authority
\nin public services is their business. As a result, people need to
\npay more to get an identity card, driver's license or birth
\ncertificate.<\/p>\n
But corruption also occurs among high-level officers with
\nrelatively good salaries. How do we explain this? Again, economic
\ntheory says that people have unsatisfied wants. They need more
\ngoods, more products and therefore more money to satisfy their
\nwants. If they have the chance to get more money, they will take
\nit. This is another way of saying that a big salary does not stop
\ncorruption if, again, the stick (law enforcement) is not there.<\/p>\n
This explains why it is so difficult to stamp out corruption
\nin Indonesia. Low salaries and a lack of law enforcement are the
\nroots of corruption. Civil servants at the lowest levels engage
\nin corruption to survive, while their colleagues at the higher
\nlevels do so to get richer.<\/p>\n
Under such conditions, protecting each other becomes
\nnecessary. There is no benefit to reporting a colleague involved
\nin corruption or prosecuting them in the courts, because that
\nwould put everyone in danger. This explains why the so-called
\nmailbox facility, where people can report corruption via
\nanonymous letters, is not effective. Nobody wants to follow up on
\nreports because it is like committing suicide.<\/p>\n
What should be done then? Reforming the bureaucracy and
\nimproving government procurement practices are good but not
\nenough. The counter-corruption policy should adopt a carrot-and-
\nstick approach. From a practical standpoint, it is not effective
\nto provide a stick if you do not also increase the salaries of
\nthe civil servants, particularly those earning the least. You
\nhave the right to give them the stick once a carrot has already
\nbeen provided.<\/p>\n
The level of the stick, or punishment, should go together with
\nthe salary levels of the officials in question. Civil servants
\nwith high salaries should receive more severe punishments for
\ncorruption. There should also be other disincentives for
\nmisconduct. Here, more sticks from the religious side can be
\nemployed, such as the one proposed by Nahdlatul Ulama. The cost
\nof committing corruption should exceed the benefit. This will
\nsend a clear message to think twice before getting involved in
\ncorruption. There should be no incentive whatsoever for
\ncorruption.<\/p>\n
Because corruption is already so pervasive around the country,
\nthe anti-corruption efforts must be taken in sequence. The
\nauthorities should start by implementing the strategy in a small
\nregion, a subdistrict for instance, before moving to a bigger
\nregion, such as a district then a province.<\/p>\n
Bear in mind that fighting corruption is not the sort of job
\nthat will be finished overnight. It is an effort that requires
\npatience, persistence and consistency. Only when this job is
\nfinished will there be any chance of turning around the current
\nsituation in Indonesia.<\/p>\n
The writer is a postgraduate student in social sciences at
\nKatholieke Universiteit Brussel. He can be reached at
\nBarlevNicodemus.Marh@student.kubrussel.ac.be.<\/p>",
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