How Change Causes Corruption
Corruption is a problem for most countries; they engage in a constant struggle to overcome it, often with little success. I know of no nation that is immune to the disease maybe Singapore or Switzerland. I am unsure. But in my travels around the world, working in different countries, I encounter the same complaint: “CORRUPTION.”
What are the causes of corruption? Why is it so wide-spread? Is it just an inborn trait in which people everywhere have corrupt value systems? Or is there more to it than that?
I believe corruption is a more complex phenomenon than simply identifying it as a failure of human values. Its roots are found elsewhere within our social system(s). Ultimately, it has to do not just with human frailty, but with CHANGE.
Take any device and expose it to drastic, severe change and what will happen? Like a piece of cloth. Pull it. Pull it some more from different directions… and what are the results? It will come apart.
It is the same with systems. They develop gaps, cracks and fissures when subject to change. During the course of repeated change, the system finally breaks down.
If we look at a nation that was once a colony, we might observe a series of multiple laws. Some date from colonial times; some are new. And, some are very, very recent and overlap with both the colonial and the so called, “new laws.” Often, the end result is major confusion as to what is right and what is wrong. We see this today in many African nations.
A similar pattern (of confusion) occurs in nations, which have had quite different political and/or economic systems over the course of their history.
Which brings us to Russia. Ruled by a Czar and a bureaucracy; followed by a violent revolution and a supreme (communist) political system with its accompanying bureaucracy; followed in turn by a relatively peaceful revolution and a new market economy system (not very free, but still….) departing from a central planning system and what you get is a lot of change.
Today, Russia has three different accounting systems, all legitimate. Imagine what that can do to comparative financial results. Imagine how it impacts auditing efforts. And, now imagine in this situation how difficult or relatively easy is it to cheat or steal…
Moreover, as change accelerates anywhere in the world, collateral problems arise like pollution, urban overcrowding, transportation problems, or how to control sanitation, or regulate the quality of food production and distribution.
All of this calls for regulation. For controls. For systems of control. For permits and licenses.
Often, the systems do not change fast enough to keep up with what needs to be controlled; change outpaces the capability of people and governments to adapt to the new conditions; to develop new or improved systems. There is a constant sense of falling behind.
The result is called a bureaucracy. It can block the capability of companies to act in a changing environment that requires prompt action.
So, we have two problems caused by change for most nations (among many which are not necessarily related to this article) gaps develop (i.e. people have no clear idea what needs to be done, when it needs to be done or how to do it, and bureaucratization of the systems settles in place. The system works all right, but at a pace that is awfully slow and inefficient. Meanwhile, the needs of the market responding to change have revved up and demand a prompt response.
This is where corruption comes to play a role.
A client who needs to make the system work has to find ways to speed up the bureaucratization process; make it shorter and more efficient. How to do that seems fairly clear. Find someone who knows the ropes, who will make the system work (rapidly). And, since such a service has value for that client, he or she will be willing to pay for it. When you pay, place your money on or under the table and you have contributed to the phenomenon called “corruption.”
Take a buyer in a retail chain or someone who is in charge of buying for a government institution. Here is where one is prone to find corruption.
The suppliers try to pay a “fee” so that they can be moved to the head of the line; so that they can suddenly be the preferred supplier. A great deal of money is at stake.
The buyer in this scenario is placed in a position where he can abuse his power. He has to decide who will get the (government) contract. In effect he chooses from whom to buy. And that decision can be influenced by who pays the most under the table.
Now, please see where the problem is: the company or government agency where bribes occur. I suggest to you, it does not have a transparent system or a working audit system of purchasing practices. If it did, it would have prohibited this “under the table” transaction from happening.
It does not have a well-functioning one because much has changed over time, making the system opaque, not transparent or broken down.
In Hebrew the expression is: “a hole in the fence calls for a thief.”
The opaqueness means lack of controls in the company which have created the conditions that can be exploited by some of its staff.
I suggest to you that the better the systems are able to function, the more transparent they are, and the more controllable, the less corruption there will be.
Here is the formula:
The more change in the country, the more bureaucracy.
The more bureaucracy within demands of a changing environment, the more corruption.
Punishing the corrupt people does not solve the problem. It might slow it down, even arrest it. However, the problem of corruption will not be ended.
It is like killing mosquitoes that carry malaria. You cannot kill them all. And, if you kill some, new ones are born. You need to dry the swamps where they breed.
We cannot punish, let alone execute all those who are corrupt. Nor can we slow down the change that is creating the “gaps” or the bureaucratization. But, we can accelerate how we de-bureaucratize the system, and re-engineer it, so there are no longer ongoing “holes.” And continuously re-engineer the system to successfully and promptly serve the clients who depend on the system to fulfill their market needs.
For a country experiencing chronic change, I would like to see a ministry in charge of de-bureaucratization, re-systematization. A model already exists within corporations which have systems engineering or continuous improvement departments. (This is what the Adizes Institute is dedicated to doing on both a corporate and a governmental level world-wide). It can be done. And should be done.
What is needed is: Less prosecution. More prevention.
Dr. Ichak Kalderon Adizes