Competition helps curb corruption: Scholar
Competition helps curb corruption: Scholar
A'an Suryana, The Jakarta Post, Jakarta
Liberalization and law enforcement constitute key factors in
the elimination of widespread corruption in transitional
countries, such as Indonesia and Russia, an international
researcher said on Monday.
The two approaches would put an end to the state being
beholden to economic actors, a major source of corruption in
transitional countries, said Joel Hellman, lead specialist on
governance issues in the World Bank's Europe and Central Asia
Region.
This frequently manifested itself as the private 'purchase' of
legislative votes, executive decrees, court decisions and illicit
political party financing, said Joel.
He said the phenomenon contributed to the presence of massive
corruption in transitional countries, a major stumbling block for
reform and economic growth for those countries.
According to Joel, the transitional countries, which have been
freed from dictatorial and corrupt regimes, still faced huge
problems on how to combat corruption.
The new era of perestroika (openness) -- Russia after 1990 and
Indonesia after 1998 -- has created new vested interests in both
the business and public sectors, where rent-seeking activities
are widespread.
In Russia, for example, large companies aggressively lobbied
the state for privileges and opposed other reforms aimed at
creating a more competitive environment, he said.
A recent survey showed that some 30 percent of Russian
companies were involved in bribery, said Joel,
Meanwhile, in Indonesia, it has been widely known that
political parties have struggled to get control of state
enterprises to secure their financial position.
As in Indonesia, the Russian experience had also shown that
politicians frequently turned to big firms, including state
enterprises, to raise funds to finance their parties before
elections, said Joel.
The phenomenon was an indication of how firms shaped the rules
of the game to their advantage through the illicit,
nontransparent provision of private benefits to public officials,
he said.
Therefore, economic liberalization, including privatization,
was essential to create greater transparency in the economic and
political sphere, which would finally prevent such practices,
which often led to corruption.
If politicians still controlled state enterprises and firms,
backroom deals between state officials and the firms would remain
widespread, he said.
"Privatization, for example, will create a more open and
competitive environment in business, since the competitive drive
will prevent politicians from engaging and interfering with
decision-making in the firms," he told participants of a
discussion held at the World Bank's Indonesia representative
office here.
The discussion was titled, "Anti-Corruption in Transition:
Lessons for Indonesia from the former Soviet Union."
Besides the liberalization, which increased transparency in
the market and politics, strong law enforcement was also
necessary in order to stifle corruption.
Law enforcement would be a deterrent so that people would
avoid becoming involved in corrupt practices.