Freeman Cebu Business

Inequality and corruption

INTEGRITY BEAT - Henry J. Schumacher - The Freeman

Why is the Integrity Initiative engaged in anti-corruption activities? Because corruption flouts rules of fairness and give some people advantages that others do not have. Corruption transfers resources from the mass public to a selected few – and generally from the poor to the rich.

Corruption is not shaped democracy, the structure of a country’s electoral system, whether government is centralized or decentralized (measured by federalism) or by the share of a country’s government expenditures spent at the local or national level. The link between inequality and corruption seems compelling. Corruption is exploitive. Inequality breeds corruption by:

* leading ordinary citizens to see a system as stacked against them;

* creating a sense of dependency among ordinary citizens and a sense of pessimism for the future, which in turn undermines the moral dictates of treating everybody honestly; and

* distorting the key institutions of fairness in society, the courts, which ordinary citizens see as their protectors against evil-doers, especially those with more influence than they have.

Economic inequality creates political leaders who make patronage a virtue rather than a vice, since it provides jobs for ordinary citizens. These leaders help their constituents, but more critically help themselves.  As mentioned above, inequality breeds corruption and leads to a dependency of the poor on their political leaders.

Corruption not only thrives under conditions of high inequality and low trust, but in turn it leads to more inequality (and thus less trust). For many countries, the trap is inescapable. Corruption aggravates inequality: the well-off can afford bribes, but the poor often do without basic services. Inequality, trust and corruption form a vicious circle that is very difficult to break.

There is one institutional factor that has a big impact on corruption: the fairness of the legal system. This is an institutional measure of inequality: whether courts and the police treat people of different backgrounds and incomes as equals before the law. It is not the same as a measure of judicial quality or the number of courts before the law or how ‘efficient’ they are. What matters for the courts is the perception that they are fair. This is the reason why the Integrity Initiative is supporting the Judicial Reform Initiative started by FINEX.

Ordinary people do not approve of corruption: Those at the bottom of the economic (and often social) ladder see it as necessary for survival. In this context, I am happy to report that the ‘Integrity for Jobs’ project, co-funded by the European Commission and the Konrad Adenauer Foundation, has effectively created ‘integrity circles’, composed of participants from the LGUs, from business and from civil society, in 60 LGUs in the Philippines, clearly addressing the scenario described above.

I will provide more details regarding our encouraging work in future columns. Let me conclude by saying, that working against corruption is everybody’s mandate.

As we at the Integrity Initiative say: “Integrity starts with I”. Every person must make the decision: “I am part of the solution! I will contribute to positive change!”

If you agree with this, you must join us.


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