The word ‘corruption’ is defined by the Oxford Advanced Learner’s Dictionary as “dishonest or illegal behavior, especially of people in authority or the act or effect of making some body change from moral to immoral standards of behavior”.
According to James D. Wolfensohn;
Corruption is a problem that all countries have to confront. Solutions, however, can only be homegrown. National leaders need to take a stand. Civil society plays a key role as well. Working with our partners, the Bank Group will help any of our
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member countries to implement national programs that discourage corrupt practices. And we will support international efforts to fight corruption and to establish voluntary standards of behavior for corporations and investors in the industrialized world. The Bank Group cannot intervene in the political affairs of our member countries. But we can give advice, encouragement, and support to governments that wish to fight corruption— and it is these governments that will, over time, attract the larger volume of investment. Let me emphasize that the Bank Group will not tolerate corruption in the programs that we support; and we are taking steps to ensure that our own activities continue to meet the highest standards of probity124 (Kindra, and Stapenhurst, 1998: 3).
The United Nations Convention against Transnational Organized Crime describes corruption as, “the solicitation or acceptance by a public official, directly or indirectly, of an undue advantage, for the official himself or herself or another person or entity, in order that the official act or refrain from acting in the exercise of his or her official duties”125 (UN, 2004: 10).
Previously, the issue of corruption was ignored in trade with developing nations, and has not always been treated as a criminal act. In some cases, it is considered as business expenditure and in others, it is portrayed as taxable act. The colonies, which were once directly under the administrative control of developed countries, became independent and sources of raw material and safer markets for their final products were not freely accessible. Therefore, corruption and manipulation of the market through such other means increased gradually which made trading or business much more costly. In the late 1970s, the U.S. administration promulgated laws126 to disallow corruption of foreign officials in trade. In the 1980s, there emerged
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James D. Wolfensohn, President of the World Bank 1996 Bank-Fund Annual Meetings Speech. 125
Article 8 (1) (b) of the United Nations Convention against Transnational Organized Crime. 126
171 increasing focus on dishonest rulers such as Suharto of Indonesia, Mobutu of Zaire, Marcos of Philippines and successive military regimes in Nigeria. Allegations of corruption and abuse of power were frequently reported in the media. In several cases, the looted wealth was more than the actual debts or liabilities of the countries. Consequently, international bodies began engaging corruption and its impact, which was a major departure considering that in decades earlier corruption was not so much a matter of urgent concern in international institutions, aid agencies and global organizations like the World Bank and IMF. This was partly because there was an assumption that talking about corruption amounted to interference in the domestic affairs of other countries (Matsheza, 2007: 2).
In the 1990’s, this approach was transformed into an international movement for anticorruption. The International Financial Institutions, donor agencies and anticorruption NGO’s took it seriously and highlighted openly through discussions, and debate the alarming effect of corruption in national development. The effects of corruption on economic growth were many and varied. President Wolfensohn in the 1996 World Bank annual meeting revealed that corruption was one of the sole obstacles to growth. Therefore, combatting corruption as an element of rule of law has brought considerable change to the expansion of the Bank’s policies in relation to legal and judicial reform projects (Asis, 2006: 4).
Tanzi suggests that there are many reasons for the projection of corruption into the agenda of developed countries. Firstly, the end of the cold war resulted in the end of double standards, which had equipped the big powers in a number of industrialized states to disregard political corruption in some countries. Secondly, there has been a possibility that because of insufficient evidence or hesitation to discuss this issue by
172 those individuals who have some friendly relations with these states. Thirdly, an increased number of democratic regimes in various states and open media made it possible for the creation of a favorable atmosphere to talk about corruption, which was previously a challenge. Fourthly, globalization has provided a platform for dialogue between least corrupt and most corrupt states. Fifthly, significant attention has been paid by the NGOs, particularly Transparency International, which publishes a corruption index and annual reports to highlight the predicament of corruption in various states.
In recent times, The World Bank, the IMF and the International institutions are taking up leading roles in the efforts to tackle corruption. Finally, the role of the U.S. in formulating anti-corruption laws cannot be ignored. Tanzi argues that American enterprises lose contracts as a result of kickbacks paid to overseas officeholders. The payment of kickbacks is also outlawed under the Foreign Corrupt Practices Act of 1977. This had impact on the minds of people. The impact of the anti-corruption campaigns has led to the indictment of political figures and high profile personalities on charges of corruption.127 History reveals that the issue of corruption is not new and is frequently cited in different civilizations. For example, Kautilya,128 a well- reputed Prime Minister of an Indian state, almost two thousand years ago, described this issue in his noted work “Arthashastra”. Dante in his “Divine Comedy” has categorized bribery in the lowest section of Hell, which reflects disliking of people of Middle-Ages. Shakespeare also discussed the issue of corruption in his plays. The
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For example, in Pakistan two successive regimes of Mian Nawaz Sharif and Benazir Bhutto were dismissed on the charges of Corruption in 1990 and 1993 respectively by President Ghulam Ishaq Khan under article 58 2 (b) of the Constitution. Again in 1997, Benazir government was dismissed on the same charges by the President Farooq Leghari (Wilson, 2009: 83).
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In the fourth century B.C, an Indian political expert Kautilya after thorough observation differentiated forty diverse behaviours that can allure the civil servants towards monetary dishonesty and identified various methods of accountability followed by punishments and incentives to avoid such actions (Sen, 1999: 275).
173 framers of the U.S. constitution were also very concerned about the issue, so they clearly added that even American President could be impeached on grounds of corruption and treason (1998: 559-560).
Sen notes that rampant corruption in Asian and African states is a key obstacle to development. He concedes that to eradicate corruption altogether from the societies is not an easy assignment but effective accountability laws can produce better results to control this dilemma. He cited the work of a Chinese author almost around 122 B.C., Huai-nan Tzu place corruption of rulers that:
The power to achieve success or failure lies with the ruler. If the measuring line is true, then the wood will be straight, not because one makes a special effort, but because that which it is “ruled” by makes it so. In the same way if the ruler is sincere and upright, then honest officials will serve in his government and scoundrels will go into hiding, but if the ruler is not upright, then evil men will have their way and loyal men will retire to seclusion (Sen, 1999: 278).
Dreher (2004: 5) suggests that corruption reflects the shortcomings or weaknesses prevalent in a political setup. Moreover, he believes that fostering political contest can encourage transparency and accountability. Mauro (1995) asserts that corruption is responsible for low economic development that eventually decreases private investment, a perception shared by Burki and Perry (1998). McGovern differentiates corruption with other ordinary crimes and points out that:
Corruption’s Advent in any community is marked by the commission of bribery, extortion and criminal conspiracies to defraud the public, without a corresponding increase in other unrelated crimes. It’s going, likewise, is accompanied by no abatement in the usual grist of larcenies, burglaries and murder. It is, indeed, a
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unique and highly complex thing; an institution, if you please, rather than a condition of society or a temper or tendency of any class of individuals (1907: 266).