Corruption is an old, widespread, and multifaceted phenomenon. In an early survey on corruption , Bardhan (1997)1 cites a treatise on public administration dating back to the fourth century BC:
“Just as it is impossible not to taste the honey (or the poison) that finds itself at the tip of the tongue, so it is impossible for a government servant not to eat up, at least, a bit of the king’s revenue. Just as fish moving under water cannot possibly be found out either as drinking or not drinking water , so government servants employed in the government work cannot be found out (while) taking money (for themselves)” (Bardhan 1997, p. 1320).
Mishra (2006) notes that references to corruption can be found in even more ancient sources, such as the Code of Hammurabi, King of Babylon (twenty-second century BC), or the Eddict of Harmhab, King of Egypt (fourteenth century BC). Maennig (2005) reports cases of corruption dating back to 388 BC. One case is attributed to the athlete Eupolos of Thessalia, who successfully bribed three of his competitors in the first combat tournament at the Olympic Games. Another early case of corruption also concerns sports. In twelfth-century BC, Damonikos of Elis, father of the Olympic wrestler Polyktor, attempted to bribe the father of the opponent to persuade his son to concede victory in the Olympic wrestling competition to Polyktor.
Looking closer to our own era, Mishra (2006) observes that corruption emerged in China under the Ming dynasty in the fourteenth century and continued spreading during the Qing dynasty through the nineteenth century. There were many attempts to curb corruption , including large-scale salary reforms, but the problem persisted. Similarly, corrupt practices were widespread during the seventeenth century in Florence despite the presence of fairly repressive anti-corruption laws.
Corruption is not only old but highly widespread. Almost no country or human activity around the world escapes the problem. In developing countries, it is almost impossible to find someone who has never been directly or indirectly (through parents or other relatives) asked for some kind of “inappropriate” payment to get something done. Although in developed countries this kind of corruption is very rare, it is equally difficult to find any country where no politician or high-ranking official has ever been convicted of taking some money from a firm or other “benefactor”. Looking at the recent release of the three most commonly used indicators of the prevalence of corruption , namely Transparency International’s Corruption Perceptions Index , the indicators provided by the International Country Risk Guide , and the Worldwide Governance Indicators, no country, developed or developing, attains the best possible score. Moreover, contrary to common belief, corruption is not limited to bureaucrats and politicians. Various studies document the prevalence of corruption in health, education , justice , law enforcement, water , sports, and even unions , and the media. Corruption is not rare even during humanitarian emergencies. According to Transparency International, corruption hampered relief efforts after the 2004 Southeast Asian tsunami .
The multifaceted aspects of corruption include its form, amount, and organization. This has important implications for understanding and fighting the phenomenon. Forms of corruption include bribery , nepotism , theft of state assets, and diversion of state revenues. Amounts range from small payments to low-ranking officials in exchange for services that citizens are entitled to in any case (i.e., “petty ” corruption ) to large payments to high-ranking officials and ministers in exchange for influencing or changing regulations and other state rules (i.e., “grand” corruption ). While the former is the most visible and exasperating to ordinary citizens, the latter is less visible but has potentially higher adverse economic impacts. From the organization angle, corruption can be isolated or collusive, centralized or decentralized, and may or may not involve intermediaries.
The above features show that winning the battle against corruption , while possible, is not easy. Mobilizing people to fight corruption is further complicated by the lack of consensus that such practices always have a negative impact. Some writers have suggested that corruption can “grease the wheels ” of business, and thus, its economic impact might be positive. Corruption can be beneficial in a second-best world because of the distortions caused by ill-functioning institutions. In 1965, Leys (1965) titled his pioneering paper “What is the Problem about Corruption ?” Bardhan (1997), meanwhile, recalls episodes in the history of Europe and the USA when corruption fostered economic development by allowing entrepreneurs to grow. Furthermore, Beck and Maher (1986) and Lien (1986) argue that corruption may raise efficiency. However, other researchers have argued that even if corruption can induce ex post positive effects, the perspective of getting money may cause bureaucrats to create ex ante conditions that support demand for corruption through new regulations, complexity, and unjustified delays. Moreover, the “grease the wheels ” effect may become ineffective or too expensive when the administration is made up of a succession of decision centers. In this case, civil servants at each stage may have some form of veto power or ability to slow down the process (Shleifer and Vishny 1993). Bardhan (1997) reports a discussion with an Indian high official who points out that while a civil servant might not be able to move a file faster, he or she could always stop it.
Against this background, the objective of Part I of this book is to discuss in depth the issues presented above in order to enable us to tackle efficiently and clearly the analysis in the rest of the book. Chapter 1 discusses the definition, amount, and overage of corruption around the world. Chapter 2 focuses on the measurement of corruption . Chapter 3 examines the causes, while Chapter 4 deals with the consequences.
References
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Bardhan, P. (1997). Corruption and Development: A Review of Issues. Journal of Economic Literature, 35(3), 1320–1346.
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Leys, C. (1965). What is the Problem About Corruption? The Journal of Modern African Studies, 3(2), 215–230.
Lien, D. H. D. (1986). A Note on Competitive Bribery Games. Economics Letters, 22(4), 337–341.
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