Fighting corruption and promoting inclusion INTEGRITY
INTEGRITY BEAT - Henry J. Schumacher (The Freeman) - July 19, 2019 - 12:00am

As we all know, corruption, by its very definition, manifests itself through exclusion of segments of the population from public services and resources. There is evidence that corruption is associated with economic inequality. It is truly a vicious cycle: corruption leads to an unequal distribution of power in society which translates into an unequal distribution of wealth and opportunity.

What we also know but very often don’t take seriously is that the quest for greater inclusion must go hand-in-hand with robust anti-corruption measures. Corruption, if unattended, will undermine efforts to make governments and companies more participatory and inclusive.

Here are some ways, business, civil society and government in the Open Government Partnership (OGP) can fight corruption and promote inclusion at the same time.

1. Make beneficial ownership information open to all

Money laundering underpins economic inequality and allows already privileged groups to avoid paying their fair share of taxes or deplete public coffers. The grand corruption scandals of recent years have exposed the crucial role of anonymous shell companies in the laundering of large amounts of money accrued from corruption, tax avoidance and other financial crimes.

Lately, beneficial ownership transparency?—?a notion that the identity of individuals who ultimately control or profit from companies should be publicly known?—?has been gaining ground as a key policy measure in tackling money laundering.

It goes without saying that company ownership information should be public, provided in an open data format, and free. Anything short of this is making it hard to detect and prevent financial crime and perpetuates economic inequality. Through an open regime of beneficial ownership information, the public can also be part of this effort and contribute to a more equitable and fair financial system.

2. Ensure that politicians and CEOs work for all and not only for some

The historically go-to participatory mechanism in democracies have been elections; however, increasingly it is becoming more common to hear about the ways in which the will of the electorate is being undermined by undue influence.

Illicit public finance of campaigns, for example, can indebt incoming public officials to the will of a select group of people or corporations, effectively excluding everybody else’s interest.

The interest of stakeholders should always be the most important criterion when policymakers and CEOs make decisions. This means leaving no space for corruption. Making political party finance transparent and opening lobbying for all to see and participate is key in ensuring that.

3. Strengthen voices of the underrepresented

Corruption does not affect all equally. Research shows that corruption disproportionately affects vulnerable populations and hits the poor the hardest.

The needs of diverse groups in society are likewise diverse, and each group can plan a different role in the fight against corruption considering their varying social, economic and political context.

If embedded in national anti-corruption policies, these three recommendations can really help to double the impact of interventions aimed at promoting participation and inclusion.

It is essential that countries like the Philippines demonstrate that they are serious about the OGP priorities by embedding inclusive and participatory approaches when designing their anti-corruption policies. These transparency efforts should copy and cascade the good examples undertaken by a good number of LGUs that implement ‘Open Contracting’ policies and involve ‘Integrity Circles’ in investment decisions.

Feedback is more than welcome; email me at schumacher@eitsc.com

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